Federal DeductionsFor the IRS Child Care Deduction, you will need to show your eligibility and file the necessary forms. To begin with, you cannot claim the deduction if you file Form 1040EZ. You must use either Form 1040 or Form 1040NR. If you are married, you must file a joint return for this credit. There are some other rules and forms which must be considered, including:
· Child Qualification - Children under the age of 13 qualify for child care deductions.
· School or Care Provider Information - Form W-10 contains important identification information. You need the school name, EIN number, and an invoice. If your child attends a home-based preschool, the care provider’s Social Security number and a Form W-4 should be used instead.
· Proof of Earnings - For most families, filing a Form W-2 for each wage earner is required. If you belong to a faith which is opposed to Social Security, a Form 4029 is used to show your earnings.
· Form 2441 - This form is where most of the care provider information will be collected.
State DeductionsIf you live in a state with a state income tax, you may be eligible for deductions at the state level. Regulations and requirements for state deductions varies from one location to another. To find out whether you can file for a deduction in your state, contact your state’s tax agency.
School Oriented DonationsPurchasing sports uniforms for your child alone are not deductible, but making a donation to the school to help cover the cost of uniforms for all team members may be. You can also claim a deduction for other donations, including the cost of items used in the preschool classroom such as crayons, paper towels, and equipment. When documented properly, even cash donations made to the school can be deducted.
Using a Flexible Savings AccountUnfortunately, you cannot claim a tax deduction for preschool if your child’s tuition was paid in full or part through an FSA. Because of the nature of FSAs, the money is already tax-free, and therefore does not qualify for an additional deduction.
Preschool expenses must be claimed as a childcare expense rather than a tuition fee. Federal law does not provide deductions or exemptions for tuitions, but child care costs are covered in order to assist families of single parents or where both parents hold full-time jobs. If you have a home-based occupation, talk with an accountant to find out how your deductions may be affected.
Montessori School in Newark offers premium Montessori Education to children ages 2 to 6. Our teachers highlight the values of a Montessori Education each day - self-discipline, self-motivation, independence, and instilling a love of learning in children. Contact us today to learn about the Montessori difference and take a tour of our preschool!