CPA Kenneth Hall discussed some back to school tax tips Monday on News 8 at Sunrise.
“The main one is the Child Care Credit,” said Hall. “If you have a child, in the I-R-S’ eyes, that’s less than age thirteen, you can deduct up to twenty percent of three thousand dollars of child care that you pay for one child, and double that for two or more children.” He added the adjusted gross income has to be $43,000 or lower and you have to have a registered child care provider.
Hall said if you contribute to a school fundraiser you can deduct the amount less anything you receive.
When it comes to private school tuition and private school uniforms, those items are not deductible. There is an exception, if there are before or after school programs associated with the private school, those can be deducted under the Child Care Credit.
Hall also discussed the use of the Educational Savings Account. He said, “It’s an I-R-S rule where you as a parent can contribute money into an account as your children are growing. With the money you put in, there’s no tax deduction but the earnings on that money are tax differed or tax deductible, to the extent you use that to pay for Private School tuition as your children grow.”
Hall noted, “The Education Savings Account is a little trickier because if you don’t use it, it gets trapped and then you pay tax on the way out. Be careful and talk to your C-P-A or financial planner.”
For more information about back to school tax tips, visit the New York State Society of CPA’s website, click here.
