When school’s out for the summer, it often means a change in your family’s schedule. Whether the kids are off to summer camp, or you decide to combine work travel with a family vacation, there are plenty of tax deductions to be had.
Summer day camp or day care
Your kids may be as free as birds at this time of year, but few working parents have the luxury of being able to hang out at home with them all summer. This usually means that you have to pay for someone else to look out for them while you’re at work. To help you out, the IRS offers a tax break for qualified child care expenses. To determine if you can claim the Child and Dependent Care Credit consider these criteria:
- Your child must be 12 years or younger
- The care must be given so that parents can work or look for work, and in some cases for parents to attend school full-time
- Eligible expenses include money paid to in-house caregivers (which cannot be your spouse or anyone you claim as a dependent), day care facilities and some day camps.
- Based on your income, this tax credit can be claimed for up to 35 percent of qualifying expenses with the maximum amount of $3,000 for one child and $6,000 for two or more children
Work travel with the family
No, you can’t deduct that Disney vacation if you attend a conference in Orlando. However, if you are traveling for business and bringing family members along, you can deduct your own travel expenses if they meet the IRS requirement of being “ordinary and necessary expenses for your job or business.”
Tax deductible travel expenses include:
- Your own transportation costs
- The cost of a single hotel room for the days that you are actually working at your destination. Keep in mind that if you upgrade to a suite or get an additional room to accommodate your family, those expenses would not be tax deductible
- Seminar and conference fees directly related to your work
- Dry cleaning and laundry
- Business calls and work-related internet access fees
- You can also deduct 50 percent of the cost of your meals on the days that you are working away from home
Be sure to get an individual receipt so that you can track and itemize your expenses.
Ease your expense expectations
As with any tax deductions, it is important to keep receipts for all of your expenses and to only claim reasonable amounts for day care for your kids and your business travel expenses. If the IRS does not consider your expenses reasonable, they may dispute the deductions—and it could raise a red flag for an audit, especially if you own your own business. In addition to receipts and expense records, if you are going to deduct travel expenses this summer, make sure you keep a detailed itinerary of your work-related activities. This includes meeting times and dates, names of meeting attendees and the topics you discuss.
Get the tax deductions you deserve this summer. From summer camp to a summer getaway, there are plenty of opportunities to take advantage of tax deductions. Just be sure to keep your expenses reasonable, make a record of your business travel schedule, and file away your receipts so that you have them ready for next tax season.
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