
Missed the tax deadline? Here’s what you should do
If you haven’t filed your taxes yet, don’t panic — but act fast.
The dependent care credit is a tax credit for working taxpayers. Bankrate explains.
The dependent care credit is a tax break for expenses paid to provide care for a dependent. It is most commonly used in connection with child care costs, but expenses to care for any qualified dependent are eligible. The taxpayer claiming the dependent care credit needs to show that providing care interferes with her ability to work.
The dependent care credit provides a tax credit for individuals who need to pay to provide care for their dependents. Typically, this credit helps to recoup expenses when caring for the dependent person prevents the taxpayer from working or looking for work. The Internal Revenue Service defines qualifying dependents as:
As long as she has earned income that year, the taxpayer may write off expenses like hiring a caretaker or paying to send a child to summer camp or day care if those expenses allow the taxpayer to work or look for work.
Expenses cannot exceed $3,000 for one qualifying dependent or $6,000 for two or more persons. The credit does not apply to the dollar amount of any expenses above the $6,000 cap.
Putting your care expenses on a credit card? Make sure you’re getting the most cash back for your purchases.
Tommen and Margaery have a 3-year-old son. During the year, their 3-year-old son is enrolled in day care to allow Tommen to work full time and Margaery to look for work. On tax day, they file jointly and claim the dependent care credit of $3,000, which partly covers the cost of the day care, on Tommen’s taxable wages.
If you haven’t filed your taxes yet, don’t panic — but act fast.
Typically, taxpayers have two options: Take the itemized deductions or take the standard deduction.
Regardless of what may cause a person to miss the tax-filing deadline, there are potential consequences.
Applying for more time to file your taxes is easy. Just don’t put off paying your tax bill.
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