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What Is An Amended Tax Return

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What Is An Amended Tax Return

What is an amended tax return 32. What is an amended tax return   Child and Dependent Care Credit Table of Contents Reminders Introduction Useful Items - You may want to see: Tests To Claim the CreditQualifying Person Test Earned Income Test Work-Related Expense Test Joint Return Test Provider Identification Test How To Figure the CreditFiguring Total Work-Related Expenses Earned Income Limit Dollar Limit Amount of Credit How To Claim the CreditTax credit not refundable. What is an amended tax return Employment Taxes for Household Employers Reminders Taxpayer identification number needed for each qualifying person. What is an amended tax return  You must include on line 2 of Form 2441 the name and taxpayer identification number (generally the social security number) of each qualifying person. What is an amended tax return See Taxpayer identification number under Qualifying Person Test, later. What is an amended tax return You may have to pay employment taxes. What is an amended tax return  If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer who has to pay employment taxes. What is an amended tax return Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. What is an amended tax return See Employment Taxes for Household Employers , later. What is an amended tax return Introduction This chapter discusses the credit for child and dependent care expenses and covers the following topics. What is an amended tax return Tests you must meet to claim the credit. What is an amended tax return How to figure the credit. What is an amended tax return How to claim the credit. What is an amended tax return Employment taxes you may have to pay as a household employer. What is an amended tax return You may be able to claim the credit if you pay someone to care for your dependent who is under age 13 or for your spouse or dependent who is not able to care for himself or herself. What is an amended tax return The credit can be up to 35% of your expenses. What is an amended tax return To qualify, you must pay these expenses so you can work or look for work. What is an amended tax return This credit should not be confused with the child tax credit discussed in chapter 34. What is an amended tax return Dependent care benefits. What is an amended tax return   If you received any dependent care benefits from your employer during the year, you may be able to exclude from your income all or part of them. What is an amended tax return You must complete Form 2441, Part III, before you can figure the amount of your credit. What is an amended tax return See Dependent Care Benefits under How To Figure the Credit, later. What is an amended tax return Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information 503 Child and Dependent Care Expenses 926 Household Employer's Tax Guide Form (and Instructions) 2441 Child and Dependent Care Expenses Schedule H (Form 1040) Household Employment Taxes W-7 Application for IRS Individual Taxpayer Identification Number W-10 Dependent Care Provider's Identification and Certification Tests To Claim the Credit To be able to claim the credit for child and dependent care expenses, you must file Form 1040 or Form 1040A, not Form 1040EZ, and meet all the following tests. What is an amended tax return The care must be for one or more qualifying persons who are identified on Form 2441. What is an amended tax return (See Qualifying Person Test . What is an amended tax return ) You (and your spouse if filing jointly) must have earned income during the year. What is an amended tax return (However, see Rule for student-spouse or spouse not able to care for self under Earned Income Test, later. What is an amended tax return ) You must pay child and dependent care expenses so you (and your spouse if filing jointly) can work or look for work. What is an amended tax return (See Work-Related Expense Test , later. What is an amended tax return ) You must make payments for child and dependent care to someone you (and your spouse) cannot claim as a dependent. What is an amended tax return If you make payments to your child, he or she cannot be your dependent and must be age 19 or older by the end of the year. What is an amended tax return You cannot make payments to: Your spouse, or The parent of your qualifying person if your qualifying person is your child and under age 13. What is an amended tax return (See Payments to Relatives or Dependents under Work-Related Expense Test, later. What is an amended tax return ) Your filing status may be single, head of household, or qualifying widow(er) with dependent child. What is an amended tax return If you are married, you must file a joint return, unless an exception applies to you. What is an amended tax return (See Joint Return Test , later. What is an amended tax return ) You must identify the care provider on your tax return. What is an amended tax return (See Provider Identification Test , later. What is an amended tax return ) If you exclude or deduct dependent care benefits provided by a dependent care benefits plan, the total amount you exclude or deduct must be less than the dollar limit for qualifying expenses (generally, $3,000 if one qualifying person was cared for or $6,000 if two or more qualifying persons were cared for). What is an amended tax return (If two or more qualifying persons were cared for, the amount you exclude or deduct will always be less than the dollar limit, since the total amount you can exclude or deduct is limited to $5,000. What is an amended tax return See Reduced Dollar Limit under How To Figure the Credit, later. What is an amended tax return ) These tests are presented in Figure 32-A and are also explained in detail in this chapter. What is an amended tax return Figure 32-A. What is an amended tax return Can You Claim the Credit? Please click here for the text description of the image. What is an amended tax return Figure 32-A Can You Claim the Credit? Qualifying Person Test Your child and dependent care expenses must be for the care of one or more qualifying persons. What is an amended tax return A qualifying person is: Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later), Your spouse who was not physically or mentally able to care for himself or herself and lived with you for more than half the year, or A person who was not physically or mentally able to care for himself or herself, lived with you for more than half the year, and either: Was your dependent, or Would have been your dependent except that: He or she received gross income of $3,900 or more, He or she filed a joint return, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. What is an amended tax return Dependent defined. What is an amended tax return   A dependent is a person, other than you or your spouse, for whom you can claim an exemption. What is an amended tax return To be your dependent, a person must be your qualifying child (or your qualifying relative). What is an amended tax return Qualifying child. What is an amended tax return   To be your qualifying child, a child must live with you for more than half the year and meet other requirements. What is an amended tax return More information. What is an amended tax return   For more information about who is a dependent or a qualifying child, see chapter 3. What is an amended tax return Physically or mentally not able to care for oneself. What is an amended tax return   Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. What is an amended tax return Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves. What is an amended tax return Person qualifying for part of year. What is an amended tax return   You determine a person's qualifying status each day. What is an amended tax return For example, if the person for whom you pay child and dependent care expenses no longer qualifies on September 16, count only those expenses through September 15. What is an amended tax return Also see Yearly limit under Dollar Limit, later. What is an amended tax return Birth or death of otherwise qualifying person. What is an amended tax return   In determining whether a person is a qualifying person, a person who was born or died in 2013 is treated as having lived with you for more than half of 2013 if your home was the person's home for more than half the time he or she was alive in 2013. What is an amended tax return Taxpayer identification number. What is an amended tax return   You must include on your return the name and taxpayer identification number (generally the social security number) of the qualifying person(s). What is an amended tax return If the correct information is not shown, the credit may be reduced or disallowed. What is an amended tax return Individual taxpayer identification number (ITIN) for aliens. What is an amended tax return   If your qualifying person is a nonresident or resident alien who does not have and cannot get a social security number (SSN), use that person's ITIN. What is an amended tax return The ITIN is entered wherever an SSN is requested on a tax return. What is an amended tax return To apply for an ITIN, see Form W-7. What is an amended tax return   An ITIN is for tax use only. What is an amended tax return It does not entitle the holder to social security benefits or change the holder's employment or immigration status under U. What is an amended tax return S. What is an amended tax return law. What is an amended tax return Adoption taxpayer identification number (ATIN). What is an amended tax return   If your qualifying person is a child who was placed in your home for adoption and for whom you do not have an SSN, you must get an ATIN for the child. What is an amended tax return File Form W-7A, Application for Taxpayer Identification Number for Pending U. What is an amended tax return S. What is an amended tax return Adoptions. What is an amended tax return Child of divorced or separated parents or parents living apart. What is an amended tax return   Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if: The child was under age 13 or was not physically or mentally able to care for himself or herself, The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year, The child was in the custody of one or both parents for more than half the year, and You were the child's custodial parent. What is an amended tax return   The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. What is an amended tax return If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. What is an amended tax return For details and an exception for a parent who works at night, see Pub. What is an amended tax return 501. What is an amended tax return   The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents. What is an amended tax return Earned Income Test To claim the credit, you (and your spouse if filing jointly) must have earned income during the year. What is an amended tax return Earned income. What is an amended tax return   Earned income includes wages, salaries, tips, other taxable employee compensation, and net earnings from self-employment. What is an amended tax return A net loss from self-employment reduces earned income. What is an amended tax return Earned income also includes strike benefits and any disability pay you report as wages. What is an amended tax return   Generally, only taxable compensation is included. What is an amended tax return However, you can elect to include nontaxable combat pay in earned income. What is an amended tax return If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. What is an amended tax return (In other words, if one of you makes the election, the other one can also make it but does not have to. What is an amended tax return ) You should figure your credit both ways and make the election if it gives you a greater tax benefit. What is an amended tax return Members of certain religious faiths opposed to social security. What is an amended tax return   Certain income earned by persons who are members of certain religious faiths that are opposed to participation in Social Security Act programs and have an IRS-approved form that exempts certain income from social security and Medicare taxes may not be considered earned income for this purpose. What is an amended tax return See Earned Income Test in Publication 503. What is an amended tax return Not earned income. What is an amended tax return   Earned income does not include: Pensions and annuities, Social security and railroad retirement benefits, Workers' compensation, Interest and dividends, Unemployment compensation, Scholarship or fellowship grants, except for those reported on a Form W-2 and paid to you for teaching or other services, Nontaxable workfare payments, Child support payments received by you, Income of nonresident aliens that is not effectively connected with a U. What is an amended tax return S. What is an amended tax return trade or business, or Any amount received for work while an inmate in a penal institution. What is an amended tax return Rule for student-spouse or spouse not able to care for self. What is an amended tax return   Your spouse is treated as having earned income for any month that he or she is: A full-time student, or Physically or mentally not able to care for himself or herself. What is an amended tax return (Your spouse also must live with you for more than half the year. What is an amended tax return )   If you are filing a joint return, this rule also applies to you. What is an amended tax return You can be treated as having earned income for any month you are a full-time student or not able to care for yourself. What is an amended tax return   Figure the earned income of the nonworking spouse described under (1) or (2) above as explained under Earned Income Limit , later. What is an amended tax return   This rule applies to only one spouse for any one month. What is an amended tax return If, in the same month, both you and your spouse do not work and are either full-time students or not physically or mentally able to care for yourselves, only one of you can be treated as having earned income in that month. What is an amended tax return Full-time student. What is an amended tax return   You are a full-time student if you are enrolled at a school for the number of hours or classes that the school considers full time. What is an amended tax return You must have been a full-time student for some part of each of 5 calendar months during the year. What is an amended tax return (The months need not be consecutive. What is an amended tax return ) School. What is an amended tax return   The term “school” includes high schools, colleges, universities, and technical, trade, and mechanical schools. What is an amended tax return A school does not include an on-the-job training course, correspondence school, or school offering courses only through the Internet. What is an amended tax return Work-Related Expense Test Child and dependent care expenses must be work-related to qualify for the credit. What is an amended tax return Expenses are considered work-related only if both of the following are true. What is an amended tax return They allow you (and your spouse if filing jointly) to work or look for work. What is an amended tax return They are for a qualifying person's care. What is an amended tax return Working or Looking for Work To be work-related, your expenses must allow you to work or look for work. What is an amended tax return If you are married, generally both you and your spouse must work or look for work. What is an amended tax return One spouse is treated as working during any month he or she is a full-time student or is not physically or mentally able to care for himself or herself. What is an amended tax return Your work can be for others or in your own business or partnership. What is an amended tax return It can be either full time or part time. What is an amended tax return Work also includes actively looking for work. What is an amended tax return However, if you do not find a job and have no earned income for the year, you cannot take this credit. What is an amended tax return See Earned Income Test , earlier. What is an amended tax return An expense is not considered work-related merely because you had it while you were working. What is an amended tax return The purpose of the expense must be to allow you to work. What is an amended tax return Whether your expenses allow you to work or look for work depends on the facts. What is an amended tax return Example 1. What is an amended tax return The cost of a babysitter while you and your spouse go out to eat is not normally a work-related expense. What is an amended tax return Example 2. What is an amended tax return You work during the day. What is an amended tax return Your spouse works at night and sleeps during the day. What is an amended tax return You pay for care of your 5-year-old child during the hours when you are working and your spouse is sleeping. What is an amended tax return Your expenses are considered work-related. What is an amended tax return Volunteer work. What is an amended tax return    For this purpose, you are not considered to be working if you do unpaid volunteer work or volunteer work for a nominal salary. What is an amended tax return Work for part of year. What is an amended tax return   If you work or actively look for work during only part of the period covered by the expenses, then you must figure your expenses for each day. What is an amended tax return For example, if you work all year and pay care expenses of $250 a month ($3,000 for the year), all the expenses are work-related. What is an amended tax return However, if you work or look for work for only 2 months and 15 days during the year and pay expenses of $250 a month, your work-related expenses are limited to $625 (2½ months × $250). What is an amended tax return Temporary absence from work. What is an amended tax return   You do not have to figure your expenses for each day during a short, temporary absence from work, such as for vacation or a minor illness, if you have to pay for care anyway. What is an amended tax return Instead, you can figure your credit including the expenses you paid for the period of absence. What is an amended tax return   An absence of 2 weeks or less is a short, temporary absence. What is an amended tax return An absence of more than 2 weeks may be considered a short, temporary absence, depending on the circumstances. What is an amended tax return Example. What is an amended tax return You pay a nanny to care for your 2-year-old son and 4-year-old daughter so you can work. What is an amended tax return You become ill and miss 4 months of work but receive sick pay. What is an amended tax return You continue to pay the nanny to care for the children while you are ill. What is an amended tax return Your absence is not a short, temporary absence, and your expenses are not considered work-related. What is an amended tax return Part-time work. What is an amended tax return   If you work part-time, you generally must figure your expenses for each day. What is an amended tax return However, if you have to pay for care weekly, monthly, or in another way that includes both days worked and days not worked, you can figure your credit including the expenses you paid for days you did not work. What is an amended tax return Any day when you work at least 1 hour is a day of work. What is an amended tax return Example 1. What is an amended tax return You work 3 days a week. What is an amended tax return While you work, your 6-year-old child attends a dependent care center, which complies with all state and local regulations. What is an amended tax return You can pay the center $150 for any 3 days a week or $250 for 5 days a week. What is an amended tax return Your child attends the center 5 days a week. What is an amended tax return Your work-related expenses are limited to $150 a week. What is an amended tax return Example 2. What is an amended tax return The facts are the same as in Example 1 except the center does not offer a 3-day option. What is an amended tax return The entire $250 weekly fee may be a work-related expense. What is an amended tax return Care of a Qualifying Person To be work-related, your expenses must be to provide care for a qualifying person. What is an amended tax return You do not have to choose the least expensive way of providing care. What is an amended tax return The cost of a paid care provider may be an expense for the care of a qualifying person even if another care provider is available at no cost. What is an amended tax return Expenses are for the care of a qualifying person only if their main purpose is the person's well-being and protection. What is an amended tax return Expenses for household services qualify if part of the services is for the care of qualifying persons. What is an amended tax return See Household services , later. What is an amended tax return Expenses not for care. What is an amended tax return   Expenses for care do not include amounts you pay for food, lodging, clothing, education, and entertainment. What is an amended tax return However, you can include small amounts paid for these items if they are incidental to and cannot be separated from the cost of caring for the qualifying person. What is an amended tax return   Child support payments are not for care and do not qualify for the credit. What is an amended tax return Education. What is an amended tax return   Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care. What is an amended tax return Expenses to attend kindergarten or a higher grade are not expenses for care. What is an amended tax return Do not use these expenses to figure your credit. What is an amended tax return   However, expenses for before- or after-school care of a child in kindergarten or a higher grade may be expenses for care. What is an amended tax return   Summer school and tutoring programs are not for care. What is an amended tax return Example 1. What is an amended tax return You take your 3-year-old child to a nursery school that provides lunch and educational activities as a part of its preschool childcare service. What is an amended tax return The lunch and educational activities are incidental to the childcare, and their cost cannot be separated from the cost of care. What is an amended tax return You can count the total cost when you figure the credit. What is an amended tax return Example 2. What is an amended tax return You place your 10-year-old child in a boarding school so you can work full time. What is an amended tax return Only the part of the boarding school expense that is for the care of your child is a work-related expense. What is an amended tax return You can count that part of the expense in figuring your credit if it can be separated from the cost of education. What is an amended tax return You cannot count any part of the amount you pay the school for your child's education. What is an amended tax return Care outside your home. What is an amended tax return   You can count the cost of care provided outside your home if the care is for your dependent under age 13 or any other qualifying person who regularly spends at least 8 hours each day in your home. What is an amended tax return Dependent care center. What is an amended tax return   You can count care provided outside your home by a dependent care center only if the center complies with all state and local regulations that apply to these centers. What is an amended tax return   A dependent care center is a place that provides care for more than six persons (other than persons who live there) and receives a fee, payment, or grant for providing services for any of those persons, even if the center is not run for profit. What is an amended tax return Camp. What is an amended tax return   The cost of sending your child to an overnight camp is not considered a work-related expense. What is an amended tax return The cost of sending your child to a day camp may be a work-related expense, even if the camp specializes in a particular activity, such as computers or soccer. What is an amended tax return Transportation. What is an amended tax return   If a care provider takes a qualifying person to or from a place where care is provided, that transportation is for the care of the qualifying person. What is an amended tax return This includes transportation by bus, subway, taxi, or private car. What is an amended tax return However, transportation not provided by a care provider is not for the care of a qualifying person. What is an amended tax return Also, if you pay the transportation cost for the care provider to come to your home, that expense is not for care of a qualifying person. What is an amended tax return Fees and deposits. What is an amended tax return   Fees you paid to an agency to get the services of a care provider, deposits you paid to an agency or preschool, application fees, and other indirect expenses are work-related expenses if you have to pay them to get care, even though they are not directly for care. What is an amended tax return However, a forfeited deposit is not for the care of a qualifying person if care is not provided. What is an amended tax return Example 1. What is an amended tax return You paid a fee to an agency to get the services of the nanny who cares for your 2-year-old daughter while you work. What is an amended tax return The fee you paid is a work-related expense. What is an amended tax return Example 2. What is an amended tax return You placed a deposit with a preschool to reserve a place for your 3-year-old child. What is an amended tax return You later sent your child to a different preschool and forfeited the deposit. What is an amended tax return The forfeited deposit is not for care and so is not a work-related expense. What is an amended tax return Household services. What is an amended tax return   Expenses you pay for household services meet the work-related expense test if they are at least partly for the well-being and protection of a qualifying person. What is an amended tax return   Household services are ordinary and usual services done in and around your home that are necessary to run your home. What is an amended tax return They include the services of a housekeeper, maid, or cook. What is an amended tax return However, they do not include the services of a chauffeur, bartender, or gardener. What is an amended tax return See Household Services in Publication 503 for more information. What is an amended tax return   In this chapter, the term housekeeper refers to any household employee whose services include the care of a qualifying person. What is an amended tax return Taxes paid on wages. What is an amended tax return   The taxes you pay on wages for qualifying child and dependent care services are work-related expenses. What is an amended tax return See Employment Taxes for Household Employers , later. What is an amended tax return Payments to Relatives or Dependents You can count work-related payments you make to relatives who are not your dependents, even if they live in your home. What is an amended tax return However, do not count any amounts you pay to: A dependent for whom you (or your spouse if filing jointly) can claim an exemption, Your child who was under age 19 at the end of the year, even if he or she is not your dependent, A person who was your spouse any time during the year, or The parent of your qualifying person if your qualifying person is your child and under age 13. What is an amended tax return Joint Return Test Generally, married couples must file a joint return to take the credit. What is an amended tax return However, if you are legally separated or living apart from your spouse, you may be able to file a separate return and still take the credit. What is an amended tax return Legally separated. What is an amended tax return   You are not considered married if you are legally separated from your spouse under a decree of divorce or separate maintenance. What is an amended tax return You may be eligible to take the credit on your return using head of household filing status. What is an amended tax return Married and living apart. What is an amended tax return   You are not considered married and are eligible to take the credit if all the following apply. What is an amended tax return You file a return apart from your spouse. What is an amended tax return Your home is the home of a qualifying person for more than half the year. What is an amended tax return You pay more than half the cost of keeping up your home for the year. What is an amended tax return Your spouse does not live in your home for the last 6 months of the year. What is an amended tax return Costs of keeping up a home. What is an amended tax return   The costs of keeping up a home normally include property taxes, mortgage interest, rent, utility charges, home repairs, insurance on the home, and food eaten at home. What is an amended tax return   The costs of keeping up a home do not include payments for clothing, education, medical treatment, vacations, life insurance, transportation, or mortgage principal. What is an amended tax return   They also do not include the purchase, permanent improvement, or replacement of property. What is an amended tax return For example, you cannot include the cost of replacing a water heater. What is an amended tax return However, you can include the cost of repairing a water heater. What is an amended tax return Death of spouse. What is an amended tax return   If your spouse died during the year and you do not remarry before the end of the year, you generally must file a joint return to take the credit. What is an amended tax return If you do remarry before the end of the year, the credit can be claimed on your deceased spouse's return. What is an amended tax return Provider Identification Test You must identify all persons or organizations that provide care for your child or dependent. What is an amended tax return Use Form 2441, Part I, to show the information. What is an amended tax return If you do not have any care providers and you are filing Form 2441 only to report taxable income in Part III, enter “none” in line 1, column (a). What is an amended tax return Information needed. What is an amended tax return   To identify the care provider, you must give the provider's: Name, Address, and Taxpayer identification number. What is an amended tax return   If the care provider is an individual, the taxpayer identification number is his or her social security number or individual taxpayer identification number. What is an amended tax return If the care provider is an organization, then it is the employer identification number (EIN). What is an amended tax return   You do not have to show the taxpayer identification number if the care provider is a tax-exempt organization (such as a church or school). What is an amended tax return In this case, enter “Tax-Exempt” in the space where Form 2441 asks for the number. What is an amended tax return   If you cannot provide all of the information or if the information is incorrect, you must be able to show that you used due diligence (discussed later) in trying to furnish the necessary information. What is an amended tax return Getting the information. What is an amended tax return   You can use Form W-10 to request the required information from the care provider. What is an amended tax return If you do not use Form W-10, you can get the information from one of the other sources listed in the instructions for Form W-10 including: A copy of the provider's social security card, A copy of the provider's completed Form W-4 if he or she is your household employee, A copy of the statement furnished by your employer if the provider is your employer's dependent care plan, or A letter or invoice from the provider if it shows the information. What is an amended tax return    You should keep this information with your tax records. What is an amended tax return Do not send Form W-10 (or other document containing this information) to the Internal Revenue Service. What is an amended tax return Due diligence. What is an amended tax return   If the care provider information you give is incorrect or incomplete, your credit may not be allowed. What is an amended tax return However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit. What is an amended tax return   You can show due diligence by getting and keeping the provider's completed Form W-10 or one of the other sources of information just listed. What is an amended tax return Care providers can be penalized if they do not provide this information to you or if they provide incorrect information. What is an amended tax return Provider refusal. What is an amended tax return   If the provider refuses to give you their identifying information, you should report on Form 2441 whatever information you have (such as the name and address). What is an amended tax return Enter “See Attached Statement” in the columns calling for the information you do not have. What is an amended tax return Then attach a statement explaining that you requested the information from the care provider, but the provider did not give you the information. What is an amended tax return Be sure to write your name and social security number on this statement. What is an amended tax return The statement will show that you used due diligence in trying to furnish the necessary information. What is an amended tax return U. What is an amended tax return S. What is an amended tax return citizens and resident aliens living abroad. What is an amended tax return   If you are living abroad, your care provider may not have, and may not be required to get, a U. What is an amended tax return S. What is an amended tax return taxpayer identification number (for example, an SSN or EIN). What is an amended tax return If so, enter “LAFCP” (Living Abroad Foreign Care Provider) in the space for the care provider's taxpayer identification number. What is an amended tax return How To Figure the Credit Your credit is a percentage of your work-related expenses. What is an amended tax return Your expenses are subject to the earned income limit and the dollar limit. What is an amended tax return The percentage is based on your adjusted gross income. What is an amended tax return Figuring Total Work-Related Expenses To figure the credit for 2013 work-related expenses, count only those you paid by December 31, 2013. What is an amended tax return Expenses prepaid in an earlier year. What is an amended tax return   If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. What is an amended tax return Claim the expenses for the later year as if they were actually paid in that later year. What is an amended tax return Expenses not paid until the following year. What is an amended tax return   Do not count 2012 expenses that you paid in 2013 as work-related expenses for 2013. What is an amended tax return You may be able to claim an additional credit for them on your 2013 return, but you must figure it separately. What is an amended tax return See Payments for prior year's expenses under Amount of Credit in Publication 503. What is an amended tax return    If you had expenses in 2013 that you did not pay until 2014, you cannot count them when figuring your 2013 credit. What is an amended tax return You may be able to claim a credit for them on your 2014 return. What is an amended tax return Expenses reimbursed. What is an amended tax return   If a state social services agency pays you a nontaxable amount to reimburse you for some of your child and dependent care expenses, you cannot count the expenses that are reimbursed as work-related expenses. What is an amended tax return Example. What is an amended tax return You paid work-related expenses of $3,000. What is an amended tax return You are reimbursed $2,000 by a state social services agency. What is an amended tax return You can use only $1,000 to figure your credit. What is an amended tax return Medical expenses. What is an amended tax return   Some expenses for the care of qualifying persons who are not able to care for themselves may qualify as work-related expenses and also as medical expenses. What is an amended tax return You can use them either way, but you cannot use the same expenses to claim both a credit and a medical expense deduction. What is an amended tax return   If you use these expenses to figure the credit and they are more than the earned income limit or the dollar limit, discussed later, you can add the excess to your medical expenses. What is an amended tax return However, if you use your total expenses to figure your medical expense deduction, you cannot use any part of them to figure your credit. What is an amended tax return    Amounts excluded from your income under your employer's dependent care benefits plan cannot be used to claim a medical expense deduction. What is an amended tax return Dependent Care Benefits If you receive dependent care benefits, your dollar limit for purposes of the credit may be reduced. What is an amended tax return See Reduced Dollar Limit , later. What is an amended tax return But, even if you cannot take the credit, you may be able to take an exclusion or deduction for the dependent care benefits. What is an amended tax return Dependent care benefits. What is an amended tax return   Dependent care benefits include: Amounts your employer paid directly to either you or your care provider for the care of your qualifying person while you work, The fair market value of care in a daycare facility provided or sponsored by your employer, and Pre-tax contributions you made under a dependent care flexible spending arrangement. What is an amended tax return Your salary may have been reduced to pay for these benefits. What is an amended tax return If you received benefits as an employee, they should be shown in box 10 of your Form W-2. What is an amended tax return See Statement for employee , later. What is an amended tax return Benefits you received as a partner should be shown in box 13 of your Schedule K-1 (Form 1065) with code O. What is an amended tax return Enter the amount of these benefits on Form 2441, Part III, line 12. What is an amended tax return Exclusion or deduction. What is an amended tax return   If your employer provides dependent care benefits under a qualified plan, you may be able to exclude these benefits from your income. What is an amended tax return Your employer can tell you whether your benefit plan qualifies. What is an amended tax return To claim the exclusion, you must complete Part III of Form 2441. What is an amended tax return You cannot use Form 1040EZ. What is an amended tax return   If you are self-employed and receive benefits from a qualified dependent care benefit plan, you are treated as both employer and employee. What is an amended tax return Therefore, you would not get an exclusion from wages. What is an amended tax return Instead, you would get a deduction on Form 1040, Schedule C, line 14; Schedule E, line 19 or 28; or Schedule F, line 15. What is an amended tax return To claim the deduction, you must use Form 2441. What is an amended tax return   The amount you can exclude or deduct is limited to the smallest of: The total amount of dependent care benefits you received during the year, The total amount of qualified expenses you incurred during the year, Your earned income, Your spouse's earned income, or $5,000 ($2,500 if married filing separately). What is an amended tax return The definition of earned income for the exclusion or deduction is the same as the definition used when figuring the credit except that earned income for the exclusion or deduction does not include any dependent care benefits you receive. What is an amended tax return See Earned Income Limit, later. What is an amended tax return    You can choose to include your nontaxable combat pay in earned income when figuring your exclusion or deduction, even if you choose not to include it in earned income for the earned income credit or the credit for child and dependent care expenses. What is an amended tax return Statement for employee. What is an amended tax return   Your employer must give you a Form W-2 (or similar statement) showing in box 10 the total amount of dependent care benefits provided to you during the year under a qualified plan. What is an amended tax return Your employer will also include any dependent care benefits over $5,000 in your wages shown on your Form W-2 in box 1. What is an amended tax return Effect of exclusion on credit. What is an amended tax return   If you exclude dependent care benefits from your income, the amount of the excluded benefits: Is not included in your work-related expenses, and Reduces the dollar limit, discussed later. What is an amended tax return Earned Income Limit The amount of work-related expenses you use to figure your credit cannot be more than: Your earned income for the year if you are single at the end of the year, or The smaller of your or your spouse's earned income for the year if you are married at the end of the year. What is an amended tax return Earned income is defined under Earned Income Test , earlier. What is an amended tax return For purposes of item (2), use your spouse's earned income for the entire year, even if you were married for only part of the year. What is an amended tax return Separated spouse. What is an amended tax return   If you are legally separated or married and living apart from your spouse (as described under Joint Return Test , earlier), you are not considered married for purposes of the earned income limit. What is an amended tax return Use only your income in figuring the earned income limit. What is an amended tax return Surviving spouse. What is an amended tax return   If your spouse died during the year and you file a joint return as a surviving spouse, you may, but are not required to, take into account the earned income of your spouse who died during the year. What is an amended tax return Community property laws. What is an amended tax return   You should disregard community property laws when you figure earned income for this credit. What is an amended tax return You or your spouse is a student or not able to care for self. What is an amended tax return   Your spouse who is either a full-time student or not able to care for himself or herself is treated as having earned income. What is an amended tax return His or her earned income for each month is considered to be at least $250 if there is one qualifying person in your home, or at least $500 if there are two or more. What is an amended tax return Spouse works. What is an amended tax return   If your spouse works during that month, use the higher of $250 (or $500) or his or her actual earned income for that month. What is an amended tax return Spouse qualifies for part of month. What is an amended tax return    If your spouse is a full-time student or not able to care for himself or herself for only part of a month, the full $250 (or $500) still applies for that month. What is an amended tax return You are a student or not able to care for self. What is an amended tax return   These rules also apply if you are a student or not able to care for yourself and you are filing a joint return. What is an amended tax return For each month or part of a month you are a student or not able to care for yourself, your earned income is considered to be at least $250 (or $500). What is an amended tax return If you also work during that month, use the higher of $250 (or $500) or your actual earned income for that month. What is an amended tax return Both spouses qualify. What is an amended tax return   If, in the same month, both you and your spouse are either full-time students or not able to care for yourselves, only one spouse can be considered to have this earned income of $250 (or $500) for that month. What is an amended tax return Dollar Limit There is a dollar limit on the amount of your work-related expenses you can use to figure the credit. What is an amended tax return This limit is $3,000 for one qualifying person, or $6,000 for two or more qualifying persons. What is an amended tax return If you paid work-related expenses for the care of two or more qualifying persons, the applicable dollar limit is $6,000. What is an amended tax return This $6,000 limit does not need to be divided equally among them. What is an amended tax return For example, if your work-related expenses for the care of one qualifying person are $3,200 and your work-related expenses for another qualifying person are $2,800, you can use the total, $6,000, when figuring the credit. What is an amended tax return Yearly limit. What is an amended tax return   The dollar limit is a yearly limit. What is an amended tax return The amount of the dollar limit remains the same no matter how long, during the year, you have a qualifying person in your household. What is an amended tax return Use the $3,000 limit if you paid work-related expenses for the care of one qualifying person at any time during the year. What is an amended tax return Use $6,000 if you paid work-related expenses for the care of more than one qualifying person at any time during the year. What is an amended tax return Reduced Dollar Limit If you received dependent care benefits that you exclude or deduct from your income, you must subtract that amount from the dollar limit that applies to you. What is an amended tax return Your reduced dollar limit is figured on Form 2441, Part III. What is an amended tax return See Dependent Care Benefits , earlier, for information on excluding or deducting these benefits. What is an amended tax return Example 1. What is an amended tax return George is a widower with one child and earns $24,000 a year. What is an amended tax return He pays work-related expenses of $2,900 for the care of his 4-year-old child and qualifies to claim the credit for child and dependent care expenses. What is an amended tax return His employer pays an additional $1,000 under a dependent care benefit plan. What is an amended tax return This $1,000 is excluded from George's income. What is an amended tax return Although the dollar limit for his work-related expenses is $3,000 (one qualifying person), George figures his credit on only $2,000 of the $2,900 work-related expenses he paid. What is an amended tax return This is because his dollar limit is reduced as shown next. What is an amended tax return   George's Reduced Dollar Limit 1) Maximum allowable expenses for one qualifying person $3,000 2) Minus: Dependent care benefits George excludes from income −1,000 3) Reduced dollar limit on expenses George can use for the credit $2,000 Example 2. What is an amended tax return Randall is married and both he and his wife are employed. What is an amended tax return Each has earned income in excess of $6,000. What is an amended tax return They have two children, Anne and Andy, ages 2 and 4, who attend a daycare facility licensed and regulated by the state. What is an amended tax return Randall's work-related expenses are $6,000 for the year. What is an amended tax return Randall's employer has a dependent care assistance program as part of its cafeteria plan, which allows employees to make pre-tax contributions to a dependent care flexible spending arrangement. What is an amended tax return Randall has elected to take the maximum $5,000 exclusion from his salary to cover dependent care expenses through this program. What is an amended tax return Although the dollar limit for his work- related expenses is $6,000 (two or more qualifying persons), Randall figures his credit on only $1,000 of the $6,000 work-related expense paid. What is an amended tax return This is because his dollar limit is reduced as shown next. What is an amended tax return   Randall's Reduced Dollar Limit 1) Maximum allowable expenses for two qualifying persons $6,000 2) Minus: Dependent care benefits Randall selects from employer's cafeteria plan and excludes from income −5,000 3) Reduced dollar limit on expenses Randall can use for the credit $1,000 Amount of Credit To determine the amount of your credit, multiply your work-related expenses (after applying the earned income and dollar limits) by a percentage. What is an amended tax return This percentage depends on your adjusted gross income shown on Form 1040, line 38, or Form 1040A, line 22. What is an amended tax return The following table shows the percentage to use based on adjusted gross income. What is an amended tax return   IF your adjusted gross income is: THEN the percentage is:       Over   But not over         $0   $15,000   35%       15,000   17,000   34%       17,000   19,000   33%       19,000   21,000   32%       21,000   23,000   31%       23,000   25,000   30%       25,000   27,000   29%       27,000   29,000   28%       29,000   31,000   27%       31,000   33,000   26%       33,000   35,000   25%       35,000   37,000   24%       37,000   39,000   23%       39,000   41,000   22%       41,000   43,000   21%       43,000   No limit   20%   How To Claim the Credit To claim the credit, you can file Form 1040 or Form 1040A. What is an amended tax return You cannot claim the credit on Form 1040EZ. What is an amended tax return Form 1040 or 1040A. What is an amended tax return   You must complete Form 2441 and attach it to your Form 1040 or 1040A. What is an amended tax return Enter the credit on Form 1040, line 48, or Form 1040A, line 29. What is an amended tax return Limit on credit. What is an amended tax return   The amount of credit you can claim is generally limited to the amount of your tax. What is an amended tax return For more information, see the Instructions for Form 2441. What is an amended tax return Tax credit not refundable. What is an amended tax return   You cannot get a refund for any part of the credit that is more than this limit. What is an amended tax return Recordkeeping. What is an amended tax return You should keep records of your work-related expenses. What is an amended tax return Also, if your dependent or spouse is not able to care for himself or herself, your records should show both the nature and the length of the disability. What is an amended tax return Other records you should keep to support your claim for the credit are described earlier under Provider Identification Test . What is an amended tax return Employment Taxes for Household Employers If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer. What is an amended tax return If you are a household employer, you will need an employer identification number (EIN) and you may have to pay employment taxes. What is an amended tax return If the individuals who work in your home are self-employed, you are not liable for any of the taxes discussed in this section. What is an amended tax return Self-employed persons who are in business for themselves are not household employees. What is an amended tax return Usually, you are not a household employer if the person who cares for your dependent or spouse does so at his or her home or place of business. What is an amended tax return If you use a placement agency that exercises control over what work is done and how it will be done by a babysitter or companion who works in your home, the worker is not your employee. What is an amended tax return This control could include providing rules of conduct and appearance and requiring regular reports. What is an amended tax return In this case, you do not have to pay employment taxes. What is an amended tax return But, if an agency merely gives you a list of sitters and you hire one from that list, and pay the sitter directly, the sitter may be your employee. What is an amended tax return If you have a household employee, you may be subject to: Social security and Medicare taxes, Federal unemployment tax, and Federal income tax withholding. What is an amended tax return Social security and Medicare taxes are generally withheld from the employee's pay and matched by the employer. What is an amended tax return Federal unemployment (FUTA) tax is paid by the employer only and provides for payments of unemployment compensation to workers who have lost their jobs. What is an amended tax return Federal income tax is withheld from the employee's total pay if the employee asks you to do so and you agree. What is an amended tax return For more information on a household employer's tax responsibilities, see Publication 926 and Schedule H (Form 1040) and its instructions. What is an amended tax return State employment tax. What is an amended tax return   You may also have to pay state unemployment tax. What is an amended tax return Contact your state unemployment tax office for information. What is an amended tax return You should also find out whether you need to pay or collect other state employment taxes or carry workers' compensation insurance. What is an amended tax return For a list of state unemployment tax agencies, visit the U. What is an amended tax return S. What is an amended tax return Department of Labor's website. What is an amended tax return A link to that website is in Publication 926, or you can find it with an online search. What is an amended tax return Prev  Up  Next   Home   More Online Publications
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General Car Tips

Whether you are buying or leasing a vehicle, these tips will help you get the best deal and avoid problems.

  • Decide what kind of vehicle best suits your needs and budget. Read our tips for choosing a safe vehicle. To compare models and get car buying tips, visit Edmunds.com or InternetAutoGuide.com.
  • Consider fuel economy. A vehicle that gets more miles per gallon is good for your wallet as well as for the environment.
  • Check out the seller. For car dealers, check with your local consumer protection office and Better Business Bureau. If you're buying from an individual, check the title to make sure you're dealing with the vehicle owner.
  • Take a test drive. Drive at different speeds and check for smooth right and left turns. On a straight stretch, make sure the vehicle doesn't pull to one side.
  • Handle trade-ins and financing separately from your purchase to get the best deal on each. Get a written price quote before you talk about a trade-in or dealer financing.
  • Shop in advance for the best finance deal at your credit union, bank or finance company. Look at the total finance charges and the Annual Percentage Rate (APR), not just the monthly payment.
  • Read and understand every document you are asked to sign.
  • Don't take possession of the car until all paperwork is final.
  • Choose an auto insurance policy that is right for you.

Vehicle Financing

Most car buyers today need some form of financing to purchase a new vehicle. Many use direct lending, that is, a loan from a finance company, bank, or credit union. In direct lending, a buyer agrees to pay the amount financed, plus an agreed-upon finance charge, over a specified period. Once a buyer and a vehicle dealership enter into a contract to purchase a vehicle, the buyer uses the loan proceeds from the direct lender to pay the dealership for the vehicle.

Another common form is dealership financing, which offers convenience, financing options, and sometimes special, manufacturer-sponsored, low-rate deals. Before you make a financing decision, it’s important to do your research:

  • Decide in advance how much you can afford to spend and stick to your limit.
  • Get a copy of your credit report and correct any errors before applying for a loan.
  • Check buying guides to identify price ranges and best available deals.

The Federal Trade Commission has more information about vehicle financing, deciding what you can afford, and consumer protections. If you need to file a complaint about your auto loan, contact the Consumer Financial Protection Bureau.

The What Is An Amended Tax Return

What is an amended tax return 11. What is an amended tax return   Employer-Provided Educational Assistance Table of Contents Introduction Working condition fringe benefit. What is an amended tax return Introduction If you receive educational assistance benefits from your employer under an educational assistance program, you can exclude up to $5,250 of those benefits each year. What is an amended tax return This means your employer should not include those benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2. What is an amended tax return This also means that you do not have to include the benefits on your income tax return. What is an amended tax return You cannot use any of the tax-free education expenses paid for by your employer as the basis for any other deduction or credit, including the American opportunity credit and lifetime learning credit. What is an amended tax return Educational assistance program. What is an amended tax return   To qualify as an educational assistance program, the plan must be written and must meet certain other requirements. What is an amended tax return Your employer can tell you whether there is a qualified program where you work. What is an amended tax return Educational assistance benefits. What is an amended tax return   Tax-free educational assistance benefits include payments for tuition, fees and similar expenses, books, supplies, and equipment. What is an amended tax return Education generally includes any form of instruction or training that improves or develops your capabilities. What is an amended tax return The payments do not have to be for work-related courses or courses that are part of a degree program. What is an amended tax return   Educational assistance benefits do not include payments for the following items. What is an amended tax return Meals, lodging, or transportation. What is an amended tax return Tools or supplies (other than textbooks) that you can keep after completing the course of instruction. What is an amended tax return Courses involving sports, games, or hobbies unless they: Have a reasonable relationship to the business of your employer, or Are required as part of a degree program. What is an amended tax return Benefits over $5,250. What is an amended tax return   If your employer pays more than $5,250 in educational assistance benefits for you during the year, you must generally pay tax on the amount over $5,250. What is an amended tax return Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income. What is an amended tax return Working condition fringe benefit. What is an amended tax return    However, if the benefits over $5,250 also qualify as a working condition fringe benefit, your employer does not have to include them in your wages. What is an amended tax return A working condition fringe benefit is a benefit which, had you paid for it, you could deduct as an employee business expense. What is an amended tax return For more information on working condition fringe benefits, see Working Condition Benefits in chapter 2 of Publication 15-B, Employer's Tax Guide to Fringe Benefits. What is an amended tax return Prev  Up  Next   Home   More Online Publications