Thu July 24, 2014
Why Kids' Summer Activities Could End Up Saving Parents Money
For busy parents, the dog days of summer are less about beating the heat, and more about finding a way to keep the kids preoccupied.
Activities can range from summer camps to soccer leagues or stints at daycare, but they all have one thing in common: they cost money. But, while there's no such thing as a free summertime preoccupation, the money parents spend on their kids' activities could return later in the form of a welcome tax deduction.
At the Switch Willow horse-riding camp in North Austin where Julie DiCarlo's daughter is, nobody is thinking about taxes.
While her 6 year-old rides the bare back of a pony, DiCarlo says her hands are full. She and her husband work full-time. He travels a lot. She keeps track of all of the summer's activities on a spreadsheet.
"She's done theater camps down at the Paramount Theatre. She's done other outdoor camps," DiCarlo says. "She's headed for a children's museum camp next week, which she's really excited about."
This summer DiCarlo has only planned activities for one of her two kids. The other one is still little, but the expenses are piling up – with costs stretching up to $5,000.
Other parents, like single mom Claire Tudor opt for in-home care. After staying home for years, she couldn't imagine what her kids would do without her
"When I was still thinking about re-entering the work-force, I would have nightmares about my children's safety and welfare," she says. Tudor hired a nanny and it's turned out to be a safe and fun care-giver for her kids. During the summer, the nanny takes them to the movies and plans activities with them. It's a little pricey, but cheaper than summer camps.
But, for Tudor, DiCarlo and other parents, some of that money could come back around at tax time.
Thomas Mangold is a certified public accountant and he says often times parents only think about their taxes once a year, usually the first week of April.
By then, everyone is so focused on filing on time that they don't take into consideration things like the summer camp their kid attended. Few know those camps – as long as they're not overnight camps – could count as child care credits. Mangold says childcare credits are only for kids under the age of 13. But there are other expenses parents can deduct
"Because the older kids that aren't eligible for the childcare credit, if they happen to buy them a car and paid sales tax on that, well, that sales tax is deductible as well as an itemized deduction," Mangold says. "Things like that that they have going on in their life and they don't really think about during the year but we do."
Mangold recommends parents learn a little more about childcare tax credits before they file. He says in today's society where many families are blended families, it's important to learn which parent can legally claim the credit and which one can't.
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