Tax Tips for Parents

Parenting is tough! You need a break—how about a tax break? Ask your tax professional about all the ways you can save on your tax bill. Here are just a few conversation starters:

• Did you know summer camps are tax deductible? Be sure to get the Tax ID number, address, and status (for-profit or non-profit). Summer camps (for children up to age 13) count as childcare when both parents are working. 
  

• Parents that have children who attend a private school for special needs may qualify for a medical expense deduction for the tuition expense if they itemize. Stipulations apply, so be sure to consult a tax professional.
• Have you made a donation to your child’s school? Most schools qualify as a 501(c)(3) organization. Keep those receipts when you give to the annual fund. Note that when a benefit is provided, that transaction does not count as a contribution. Some states offer a tax deduction for contributions to a 529 Education Savings Plan. This money can be accessed for private school tuition or secondary education. 
• The IRS allows a sole proprietorship that is wholly owned by the child’s parent to pay wages to their own children under the age of 18 without having to withhold payroll tax. The benefit of that is, now your child has earned income and you can establish a traditional or Roth IRA for the child. There is no minimum age, but you need to employ them in an age-appropriate position. ​

Every tax break comes with stipulations and specifications. Always reach out to your tax professional to ensure you qualify. Want to know what benefits may be available to you? Give Piedmont Accounting & Business Solutions a call today.