Tax Break: Summer Day Camp
The passing of Memorial Day marks the beginning of summer. Although the kids might still be in school for another week or two, summer day camp is rapidly approaching for many families. If yours is among them, did you know that sending your child to day camp might make you eligible for a tax break?
Day camp is a qualified expense under the child and dependent care credit, which is worth 20% of qualifying expenses (more if your adjusted gross income is less than $43,000), subject to a cap. For 2014, the maximum expenses allowed for the credit are $3,000 for one qualifying child and $6,000 for two or more.
Be aware, however, that overnight camp costs don’t qualify for the credit. Additional rules apply.
There’s still time to get substantiation for 2013 donations
To support a charitable deduction, you need to comply with IRS substantiation requirements. This generally includes obtaining a contemporaneous written acknowledgment from the charity stating the amount of the donation, whether you received any goods or services in consideration for the donation, and the value of any such goods or services.
“Contemporaneous” means the earlier of 1) the date you file your tax return, or 2) the extended due date of your return. So if you made a donation in 2013 but haven’t yet received substantiation from the charity, it’s not too late – as long as you haven’t filed your 2013 return. Contact the charity and request a written acknowledgement.
Jim Komos is the Partner-in-Charge of the firm’s Tax Department. He has experience in all facets of taxation for individuals, closely held businesses, their owners, and key personnel. Contact him at 216.831.7171 or jkomos@cp-advisors.com.
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