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Everything that you need to know about Childcare Deduction

Alot of my friends and I have young children, and one thing everyone can typically agree on is it’s not cheap sending them to daycare!  The good news here is you may be able to deduct some of your expenses from your taxes if you meet certain guidelines. 

First, the child, or dependent, must be under 13, and they must require care to allow you to either work or look for work.  You can take a percentage of your expenses between 20% and 35% to deduct, maxing out at 3,000 for 1 child and 6,000 for two or more.  The higher you make, the smaller percentage you can max out but the good news here is there is no higher income limit. 

It’s also important to note that if your employer provides you any money to go towards your child care expenses, or if the money is withheld from your check, then this money must be subtracted from your allowable expenses. Finally, in order for you to take this, you will have the care provider’s name, address, and taxpayer identification number, or TIN.

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