The 2017 tax season is over, and filing time has arrived. For parents of small children, the question of whether they can claim preschool expenses, and how to claim them is important. We have compiled some pertinent information which should be helpful in trying to gets your tax forms in order.
Child and Dependent Care Expenses
Kiplinger’s explains that a portion of your child care expenses can be claimed as a credit, which affects your net income. Note that this is a credit used to calculate net income, rather than a deduction calculated against that income. There are some qualifying considerations before you can claim the credit, including:
- Parent Requirements
- Single parent working or attending college fulltime.
- Both parents work fulltime, or looking for work
- One parent works fulltime, the other attends college classes fulltime
- Income Parameters
- Income less than $15,000 can claim up to 35% of expenses
- Percentage gradually decreases down to 20% for income greater than $43,000
- Maximum Credit Amounts
- Maximum of $1,000 for one child
- Maximum of up to $6,000 for 2 or more children
Information Concerning IRS Publication 503
IRS Publication 503 details the forms necessary for claiming child and dependent care expenses. To claim the credit, you will have to file Form 1040, and include Form 2441, Child and Dependent Care Expense as part of your long-form filing. Publication 503 lists the information necessary, including when you must file a Form w-10, which tests you must pass to be eligible, and other information. For additional assistance, you may contact the IRS directly, or seek the help of a tax professional.
If your child’s preschool is a non profit organization, money or items you donate may be deductible. The important thing about charitable donations to the school are that they must be made to the school itself, rather than supplies intended for your child alone. For example, donating art supplies may be deductible, but providing art supplies specifically for your child are not. This is true for school uniforms, classroom supplies, or other donations. As long as you donate to the entire class or the school in general you are okay, but sending supplies for your child are not – and may be required by the school’s charter anyway.
As you see, you cannot claim the cost of preschool directly, but may be eligible for credits that affect your overall tax obligations. Even though you may not be able to get credit for the entire cost of preschool, you will be able to use Form 2441 to reduce the amount of money you owe, or to adjust your net earnings.
The Montessori School of Flagstaff Westside Campus offers programs for preschool and kindergarten children, ages 3-6. Our children’s house allows students to work at their own pace with gentle guidance from teachers and older students. To learn about our programs and curriculum, contact us today and schedule a tour.