If you, a spouse, or your dependents had medical or dental expenses that exceeded 10% of your adjusted gross income, you can deduct them. The dependent person can’t have an income over $4,050. To claim these family members as dependents, you and they must meet specific criteria like income requirements. If you care for aging family members like parents, grandparents, aunts, and uncles, etc., those people may qualify as dependents, even if they don’t live with you. The tax credit is up to $6,000 for two children, or more so you can claim that additional $1,000 and doing so will cut $200 or more from your tax bill. ![]() However, the pre-tax amount you can use is just $5,000. No double-dipping though.Įxpenses paid with pre-tax money can’t be used to take advantage of the tax credit. If you use a reimbursement account, you can avoid federal income tax andthe 7.65% Social Security tax. In that case, the credit would be the better choice. Suppose you are eligible for a 20% credit but are taxed at 25%. If your company allows you to use pre-tax money for child care costs, that may be a better option than taking the deduction though. ![]() ![]() When you use childcare while at work (not for date night, sorry!) you can take a tax deduction between 20-35% of those costs.
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