Working parents rely on child care services to keep a watchful eye on their children while they are away at work each day. The best daycare services provide children with a nurturing environment, educational benefits, social interaction and more, so there are many positive aspects associated with the use of the right child care facility. However, daycare costs in many areas of the country can be exorbitant, and you may be wondering how to determine the true cost of these services.
Tallying Up All of the Costs
In order to determine what the true cost of your child care expense is, it is important to tally up all related daycare costs. This obviously includes your monthly tuition payment, but there may also be other related expenses. For example, some daycare environments require children to wear uniforms. Some may have application fees, annual supplies fees and more. Some may even require you to contribute financially for field trips or even for special holiday or seasonal parties. All of the costs associated with the use of a daycare facility can be staggering when you make the effort to create an annual grand total.
What You Need to Know About the Available Tax Credit
The good news is that there is a child care advantage available from the IRS. The Internal Revenue Services gives parents the opportunity to right off a portion of their tuition for a tax credit. Keep in mind that the provider must be a qualified provider as determined by the IRS, and you must have the provider’s tax ID number. More than that, you can only write off a very small portion of your tuition each year, and this means that the tax credit may only make a small dent in the total child care fees you pay each year.
How to Keep Costs Low
After you have tallied up the total cost you pay each year in care services, you understandably may want to learn about effective ways to keep costs low. One idea is to look for a more affordable daycare to take your kids to. If you have multiple kids, it may even be cheaper and more convenient to have in-home care services. This may have greater relevance after you factor in annual fees, field trip costs, uniforms and more for all of your kids.
Parents often live on very tight budgets, and this is particularly true during children’s younger years when they are in a care facility. Take these steps today to determine if you are maximizing your child care tax credit and to determine if you can save money on this expense in other ways. You can learn additional information at Wee Watch.