Workplace Dependent Care Benefits

by | Jan 24, 2020 | Internal Revenue Service, Tax | 0 comments

If you have paid for the care of your dependent(s) in the past and anticipate that dependent care will likely continue through 2020, then you will want to think about a specific work place benefit that may be available through your employer. Dependent Care Benefits, located on your W-2, Box 10, allows you to exclude up to $5,000 ($2,500 married filing separate) of your earned income for qualified care and expenses. Dependent Care Benefits through your employer can save Federal, State (if applicable), Social Security and Medicare tax which could make this a better option than the dependent care deduction on your personal tax return.

Know The Qualifications: 

Hiring assistance through an individual or organization to care for a child or disabled family member is a reality for most working families.  Thankfully, W2 employees may have an option to combat increase in pricing and costs of child care through their employers. Qualifications for dependent care include the following:

  1. A child under the age of 13, of whom you are authorized to claim as a dependent on your tax return
  2. A spouse or family member that is physically or mentally disabled
  3. The care is acquired so that you may be gainfully employed
  4. Dependent regularly spends 8 hours per day in your household, for those services which take place out of the home
  5. Outside organizations hired complies with all applicable state and local laws and regulations
  6. The fair market value of the dependent care expenses are provided for the applicable year
  7. You must report to the IRS on your 1040 tax return the name, address and social security number (or other tax payer identification number) of any dependent care service provider 

Come Tax Time:

Taking advantage of dependent care benefits provided through your employer will allow a significant tax savings over the course of the year for your family. Reach out to your Human Resources Department or employer to determine if  your benefit plan qualifies.

If you have any questions or concerns relative to the most advantageous tax strategy for your family, please contact us HERE or give us a call at 248-934-0550. We would be honored to help.

Disclaimer

Always remember, Senter, CPA is here for you if you need any assistance.

Don't hesitate to give us a call at 248-934-0550, or contact us below.

Keep Your Receipts Nearby and Organized

Business owners understand that receipts are everywhere and also can seemingly end up nowhere to be found.

Are Unused Subscriptions Costing You Money?

As household expenses continue to rise, identifying unnecessary recurring charges is a practical way to improve cash flow without making significant lifestyle changes. Many consumers unknowingly pay for subscriptions they no longer use, forgot to cancel after a free trial, or no longer find valuable. While individual charges may seem insignificant, the combined annual cost can amount to hundreds of dollars.

Your Year-End Tax Bill Shouldn’t Be a Surprise

December has a way of making tax planning feel urgent—but by December, you’re already behind the strategy and some of the best planning opportunities could have already passed you.

Fall Accounting

It’s like spring cleaning, but now we’re working on it in between Back to School and Football and Pumpkins and Mostly Great Weather!

Trump Accounts: What Parents—Especially Michigan Families—Need to Know

Trump Accounts are a new type of savings vehicle designed to help families build long-term financial resources for children. Structured as a special type of traditional IRA, these accounts have specific rules governing eligibility, contributions, investments, and withdrawals.

Senter Forward: The Kind of Client Relationship We Want to Build

I will start with something that may sound strange coming from a CPA firm: we are not trying to take every piece of work that walks through the door.
We have reached a point where the question is less “Can we prepare this return?” and more “Can we build a relationship here where our team can actually help?” That difference matters.

Federal Updates on Tip And Overtime Tax Deductions

Recent federal tax legislation introduced new deductions related to qualified tip income and overtime pay. These changes may benefit eligible employees while also creating additional reporting responsibilities for employers. At Senter CPA, we are helping both businesses and individual taxpayers understand how these rules apply and how to stay compliant.

1099 Filing Requirements Update! Yes, this is good news!

The reporting amount threshold has increased. Yes, you read that right! The old $600 filing requirement for 1099-MISC & 1099-NECs has been increased to $2,000, with some minor exceptions.

To jog your memory, if you need it, you are required to file 1099s to those who you pay for rent, contract labor (not through your payroll), interest, etc. The 1099-MISC is most commonly used to report rent, while the 1099-NEC is mostly used to report non-employee compensation to most everyone.

Mid-Year Financial Checkup Checklist: Are You on Track for 2026?

Summer is a good time to check in on your finances. The year is already halfway over, which makes it easier to see what’s working and what might need attention. Maybe your income has changed. Maybe you’ve spent more than expected or fallen behind on a savings goal.

Understanding Quarterly Estimated Tax Payments

If you’re self-employed, a freelancer, or a small business owner, quarterly estimated tax payments are an important part of staying current with your federal tax obligations. Because taxes typically aren’t withheld from self-employment income, the IRS requires many taxpayers to pay taxes throughout the year instead of waiting until they file their annual return. Making timely estimated payments can help avoid a large tax bill and potential underpayment penalties.