We’ve compiled a list of common audit triggers…14 ways that your return may draw extra scrutiny. See www.kiplinger.com/letterlinks/auditredflags for details.
Don’t miss out on this tax break if you use a flex plan for child care costs: You can still claim the dependent care credit to the extent your expenses are more than the amount that you pay through your flexible spending account. The maximum dependent care costs funded through an FSA are $5,000. But the credit applies to as much as $6,000 of eligible expenses for filers with two or more children under the age of 13.
In that case, you’d run the first $5,000 of dependent care costs through the FSA, and the next $1,000 would be eligible for the credit on Form 2441. For most filers, taking the dependent care credit will save an extra $200 in taxes. Of course, no credit is allowed for any child care costs that are paid via the flex plan. Keep this in mind if your school-age child is going to a summer day camp: The cost qualifies for the dependent care credit. So if you send your child to any special day camps this summer, such as those for sports, computers, math or theater, don’t forget this break. Ditto for camps to help with reading or study skills.
But the costs of summer school and tutoring programs aren’t eligible for the credit… they are treated as education, not care. The other rules for the credit aren’t affected. The child must be under 13, and expenses must be incurred so the parents can work