Are children’s summer camps tax deductible?

summer camp

Did you know that summer camp expenses are tax-deductible in some cases? During summer, many American children spend time at camps of various kinds. Although these recreational camps may be rather expensive, you might be able to get a tax credit for these expenses. Let’s take a look at the conditions under which you can claim summer camp expenses on your tax return:

Conditions under which summer camps can be tax-deductible: summer camp

When the camp functions as daycare

If you send your children to summer day camp, you should be able to deduct expenses under the provisions of Child and Dependent Care Credit. This is valid for children under the age of 13 at the end of the relevant tax year. For disabled dependents, there is no age limit. The reasoning behind this condition is that you are not sending your children away merely for their pleasure, but you are putting them in the care of other responsible guardians who can look after them while you are working. 

If there is no one in the household to care for the children at home when school is out 

If your spouse or partner is at home and can take care of the children when they are not in school, you won’t be able to claim these tax deductions. If you and your spouse or partner are both at work or school, then you may qualify for tax credit or deductions. 

They have to attend camp at a real institution

Unfortunately, you can’t just send your kids over to play at the neighbors and qualify for tax deductions. To qualify, you need to make a payment to a recognized person, facility, or organization. When you do your return, you need to furnish details, including the address and identifying number.

The cost of transport isn’t automatically included in deductions 

Unless the transport cost is included in the fees, you won’t be able to deduct the costs expended on getting your children to and from the campsite or location. If the camp fee includes transport, then you may qualify for the tax credit. 

Did you know that you can get tax credits between 20% and 35% of what you spent on daycare? The tax credit you may qualify for depends on the number of children and your AGI (adjusted gross income). At Georgen Scarborough Associates, PC, we can help you to make sense of all these conditions and limits.

For assistance on your tax refund, contact our tax experts to discuss tax deductions and other tax tips.

The PATH Act explained by GSACPA

The path act

According to the IRS, the Protecting Americans from Tax Hikes (PATH) Act was enacted in 2015. This act extends to various aspects that taxpayers should be aware of, including changes to legislation that regulate taxes and extending some laws that would have expired. The act aims to protect taxpayers against fraud. It includes provisions that may affect the taxpayer credits of individuals and businesses. This guide will take a look at those aspects. The path act

What taxpayers need to know about the PATH Act 

The PATH Act extends expired tax laws and introduced new regulations to reduce fraud and to ensure that Americans get the correct refunds from the IRS. The PATH Act now addresses regulations governing Additional Child Tax Credit (ACTC), Earned Income Tax Credit (EITC), and Work Opportunity Tax Credit (WOTC). Although the act may not change the amount of your return or when you receive your refund, it does ensure that certain tax credits are monitored more closely.

The most important aspect to recognize is that the PATH Act will not change how you complete your tax return. Although early filers may experience some delays, these delays afford the IRS opportunities to counteract possible tax fraud.

Key aspects of the PATH Act

Under the Act, some taxpayers who file early for Additional Child Tax Credit (ACTC) or Earned Income Tax Credit (EITC) may receive their refund later. These taxpayers could have to wait until after the 15th of February to receive a refund. The delay allows the IRS to verify information that can help to reduce tax fraud. All pending refunds should be released from the 15th of February, so if you don’t receive your refund within 4-6 weeks after the 15th of February, you may want to visit the IRS website to find out about the delay. 

The Act has retroactively extended the Work Opportunity Tax Credit (WOTC). This is a credit for employers who hire workers from target groups faced with barriers to employment. 

If you’re still unsure about any part of the PATH Act, or if you need more tax tips, visit our website or reach out to talk to a tax expert about your tax refund. 

Essential Tax Tips for First Time Tax Filing

tax filing tips

Need some tips on filing taxes for the first time? With these tax tips, filing your taxes for the first time can be a little less daunting.

relieve stress

Tax Tips for Filing Taxes

How you approach your filing can make all the difference between getting it done quickly and a massive tax headache.

Here’s how to make filing taxes easier:

Step 1: Gather all the information you will need, and keep it on hand while filing your taxes.

Step 2: Start the process early to avoid any penalties and deadline related anxiety.

Step 3: Use free resources to help you manage your filing and tax-related issues easily.

Free Resources to Help You With Filing Taxes

Your first stop for reliable, updated tax resources should be the Internal Revenue Service. This website (www.irs.gov) has resources to help out any tax filer, including those in the military service, individuals with disabilities, and seniors or retirees.

Resources also include an Interactive Tax Assistant (https://www.irs.gov/help/ita), various Tax Tools as well as links to the different forms and documents you will need.

More Tax Tips and Questions

Do I Need to File a Tax Return?

The answer will differ from one case to the next, but filing a tax return may be beneficial, even if you are not required to do so by law. If you’re unsure of the requirements, this resource (https://www.irs.gov/ forms-pubs/about-publication-501) can help you determine if you need to complete a tax return.

Can I File My Own Return or Do I Need Professional Help?

In many cases, you can file your taxes without professional help. If you only have a single income from formal employment or your tax status is unchanged (meaning that you didn’t get married or divorced, you didn’t acquire a business or make large investments) and you have a clear understanding of what your tax software requires from you, then you can file your own tax return. However, it is still a good idea to consult the relevant resources to guide you through the process.

You may need professional help with filing your taxes if you have more than one stream of income (from investments, a business, rental income, and the like.) or if you want to get a strategic plan together for structuring your taxes. If you don’t understand the process and you’re worried about making mistakes it is always advisable to get professional help with filing your taxes.

Which Dates Do I Need to Remember for 2020?

Visit our blog for all the dates that you need to remember for the 2020 tax season. Keep in mind that there are different dates for federal and state taxes.

At Georgen Scarborough Associates, PC, we are committed to giving each client personal attention to ensure that your tax preparation is handled quickly and efficiently. For more tax tips and information on our services, visit our website.

Child Tax Credit 2019: How to Qualify

child tax credit

As most parents in the USA are now aware, the dependency exemption of $4,050 has been eliminated. Thankfully, though, it is still possible to apply for various tax benefits and credits if you have children or dependents in your care. One of those benefits is the Child Tax Credit. Interested to know if you qualify to receive it? We have got all the facts below:

What Are the Qualifying Criteria? 

There are only four qualifying criteria when it comes to the Child Tax Credit for the tax year of 2019:

  1. You need to have at least one child in your care who is under the age of 17 at the endchild tax credit of the calendar year.
  2. You need to earn less than $400,000 per annum if you are filing jointly with your spouse OR less than $200,000 per annum if you are single and filing individually. 
  3. You need to have provided at least half of the child’s support over the course of the last year.
  4. The child needs to have lived with you for a period of at least six months over the course of the last year (there are some exceptions to this rule).

How Much Is the Child Tax Credit Worth for the Tax Year of 2019? 

You can get up to $2,000 per qualifying dependent child through the Child Tax Credit. Seeing that it is a tax credit rather than a deduction, it reduces your taxes dollar-for-dollar. Furthermore, up to $1,400 of the Child Tax Credit is refundable. In other words, it can take your tax bill right down to zero and you will still have the opportunity to get a refund on anything left over. child tax credit

If you have dependents living with you who are over the age of 17 but that still qualify as dependents (usually as a result of a disability), there is a $500 non-refundable credit that you can obtain via the Child Tax Credit benefit

Be sure to get in touch with the Certified Public Accountants at Georgen Scarborough Associates, PC, if you have any further questions about the Child Tax Credit and how to qualify. 

Having Dependents Has Significant Tax Benefits

child tax credit

Are you aware of the fact that having dependents still has the potential to save you hundreds of dollars in tax, despite the elimination of the dependency exemption of $4,050? It is true! Below, we provide you with some expert insight into the different tax benefits that you can continue to take advantage of going forward. 

Child Tax Credit 

Tax credits are different from tax deductions in that they reduce your taxes dollar-for-dollar. The great news is that while the dependency exemption is no longer in existence, the Child Tax Credit has been

child tax creditdoubled and is now $2,000 in total. You should qualify for this credit if you are the caregiver of one or more children under the age of 17, and if you and your partner’s income threshold is $400,000 (if you are married and filing jointly). If you are single, the income threshold currently sits at $200,000.

Child and Dependent Care Credit 

There is no doubt that working parents will all agree that childcare takes a massive chunk out of their earnings. Luckily, many of these parents are eligible to receive the Child and Dependent Care Credit. The only criteria are that you are employed or actively in search of a job and your child(ren) and/or dependents are under the age of 13child and dependent care credit or are disabled in some way. With this credit, you will also receive a dollar-for-dollar reduction of between 20% to 35% (depending on your annual income) of $3,000 ($1,050) for one child or $6,000 ($2,100) for two or more children.

Earned Income Tax Credit (EITC) 

If you earn less than a certain amount and you have children in your care, you may qualify to receive the Earned Income Tax Credit. For the tax year 2019, the credit ranges from $6,557 for three or more children down to $529 with no children.

earned income tax credit

Would you like more information regarding tax benefits in the USA? Then it is time to book an appointment with the Certified Public Accountants at Georgen Scarborough Associates, PC. Contact us today!

Tax Preparation Tips for Small Businesses

Tax tips for businesses

Do you own a small business? Trying to educate yourself in terms of how to prepare for the tax season? If so, you are also probably asking yourself a number of questions, such as whether or not you should try to handle all of your tax-related matters yourself as well as how can you reduce your company’s chances of being audited by the IRS? Here are some tax preparation tips for small businesses to help you on your way.

Make the Most of It

It is possible to really take advantage of your tax deductions and credits if you make the effort to keep track of them throughout the year. Deductions that you can take into account include items like business furniture, supplies for the office, and start-up expenses.

Invest

You will quickly come to find that keeping track of all the necessary numbers and information necessary for small business tax is time-consuming and demanding. This is why it can be a much better idea to invest in software to do it for you. There is also an array of useful apps available for a fraction of the cost, which can also help to streamline these processes.

Research the Forms

There are a lot of different tax-related forms that you should familiarize yourself with upon first starting your small business. Doing so will save you a lot of time in the future! Most importantly, you’ll want to know which ones are relevant to your business based on its type. For example, sole proprietors will need to attach a Schedule C to their personal income tax return, while corporations will need to use a Form 1120 or 1120S.

Looking for professional assistance when it comes to tax requirements for your small business? Look no further than the experts at Georgen Scarborough Associates PC. Contact us for more details today.