For
instance, you may be able to take a child and dependent care credit if your
child is under the age of 13 at the end of the year. However, not all expenses
qualify, and some expenses may qualify for both the dependent care credit and
the deduction for medical expense, depending on your circumstances. In
addition, if your employer offers a flexible spending plan, you might consider
whether or not participating in the plan saves you more money than claiming the
credit. If you are divorced, the issues can be more complicated. Who is
entitled to an exemption for your child and how does claiming the exemption
impact other tax benefits for a dependent?
Even
if child care is not a concern of yours, these examples illustrate how complex
family tax planning can be. There are many other tax considerations, such as
the benefits and pitfalls of shifting income to minor children in light of the
kiddie tax; determining what expenses qualify for the education credits and
deductions and who can claim them; the eligibility requirements for the earned
income credit; or the impact of the alternative minimum tax. We can help you
see the bigger picture and develop a plan that both meets your needs and saves
you money. Please call our office at your earliest convenience to make an
appointment for a full review of your tax situation.
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