I have 2 opportunities for daycare. I trust both sources equally, but don%26#039;t know if financially if it would be better for me to pay $150 wkly %26amp; not use the childcare tax credit or to pay $175. wkly and take benefit of the childcare tax credit. can someone show me the benefit of one or the other?
Am I better of paying $150. weekly and not claiming the childcare tax credit or $175. wkly and claiming?
You can claim the credit either way, so go with the lower cost solution all else being equal.
Am I better of paying $150. weekly and not claiming the childcare tax credit or $175. wkly and claiming?
If you qualify, $175 with a childcare credit might be better than $150 without it because you will be able to deduct around 20-35% of $175. Keep in mind that the maximum child care expenses is $3,000 for 1 child and $6,000 for 2 children. Child care credit is 20-35% of $3,000 depending on your income.
Am I better of paying $150. weekly and not claiming the childcare tax credit or $175. wkly and claiming?
The $150 a week option is technically illegal since what the day care provider is doing is asking you to pay them monies they will not be claiming as income. If you don%26#039;t care about that then you can look at the numbers using this year%26#039;s tax info. Run your numbers through any of the online tax programs and see what the difference in your taxes would be.
The lower day care cost will save you $1300 over the course of a 52 week year. See how much less you owe in taxes by claiming the $9100 you will pay with the higher day care cost over a 52 week year.
Am I better of paying $150. weekly and not claiming the childcare tax credit or $175. wkly and claiming?
is the maximum tax credit at least $1300/yr ($25 per week?) - If not, you%26#039;re better off with the $150/wk rate
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