Category: tax deductions

If you have set up a day care business in your home, you are eligible for daycare tax deduction. This deduction is valid even if you do not use the premises exclusively for business. What is a care centre by day can well be home by night; and you will still be eligible.

However, it is important to know what qualifies as daycare. When you provide care for children or individuals incapable of looking after themselves because of physical or mental impairments you are in the daycare business. But to run one, you need to have valid certifications or exemptions. If, however, you have had your license revoked or application rejected, you are not eligible to run a daycare centre.

Keywords: Tax Deductions, Tax Savings, Tax Planning

Kids are legally allowed to be hired as employees by their parents when they are 7 years old, provided that the work assigned to them is not mentally and physically challenging, and is within their means to achieve it. The number of hours and the type of assignments completed by the child should be recorded on an Excel Sheet. As long as the pay and the work given to the child are reasonable, you can avail of the tax deduction.

The wages given to your kids do not go into their piggybanks, but into your bank. The money can, and will, be spent only with your approval on the necessary clothes, education, toys, and so on.

Finally, the most important record to keep is to make sure that your kids do not pay for more than 49% of their expenses. Their total expenditure thus needs to be tracked at all times, because if they cross the 50% mark, then you end up losing them as an itemized deduction on your personal return.

Keywords: Tax Deductions, Tax Savings, Tax Planning