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Tax question about childcare costs
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Quick tax question

If I paid $4000 in September for an afterschool program for my kids, but it covers them through the winter/spring school year part of 2018, do I deduct all $4000 from my 2017 taxes (since it was paid in full in 2017) or do I only deduct the portion that covers the actual care they had for Sept, Oct, Nov, Dec 2017, and save the rest to declare on my 2018 taxes?

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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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I am not an accountant, but it looks like you can only count the portion of prepaid fees that are consumed in 2017, and will need to count the remainder for 2018. from the IRS: https://www.irs.gov/...17_publink1000203344

How To Figure the Credit[/url][/url][/url]
Your credit is a percentage of your work-related expenses. Your expenses are subject to the earned income limit and the dollar limit. The percentage is based on your adjusted gross income.

[/url]Figuring Total Work-Related Expenses[/url]
To figure the credit for 2017 work-related expenses, count only those you paid by December 31, 2017.

Expenses prepaid in an earlier year.
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If you pay for services before they are provided, you can count the prepaid expenses only in the year the care is received. Claim the expenses for the later year as if they were actually paid in that later year.


Expenses not paid until the following year.
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Don't count 2016 expenses that you paid in 2017 as work-related expenses for 2017. You may be able to claim an additional credit for them on your 2017 return, but you must figure it separately. See Payments for prior year's expenses under Amount of Credit, later.
[/url]

If you had expenses in 2017 that you didn't pay until 2018, you can't count them when figuring your 2017 credit. You may be able to claim a credit for them on your 2018 return.

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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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Mendeldave wrote:
Quick tax question

If I paid $4000 in September for an afterschool program for my kids, but it covers them through the winter/spring school year part of 2018, do I deduct all $4000 from my 2017 taxes (since it was paid in full in 2017) or do I only deduct the portion that covers the actual care they had for Sept, Oct, Nov, Dec 2017, and save the rest to declare on my 2018 taxes?

I think you can deduct it all

Reasoning: you can deduct credit card charges when charged in 2017 and not paid until 2018 and I know people pre-pay insurance policies to deduct in 2017 even though the policy payments were for 2018. Go for it.
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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In Canada we are on a cash basis so if you pay them in 2017, you can deduct them in 2017. I believe it would be the same in the U.S.

You're such a Trump ball washer! - Duffy - Feb 8, 17 13:18
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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You can only count the services paid for and utilized in each calendar year.
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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If it is a licensed facility, you should have been provided, or they should be able to quickly turnaround a request for a form showing their federal tax ID # and how much you paid in 2017. Your tax forms ask for their federal id #.
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Re: Tax question about childcare costs [Harry] [ In reply to ]
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It is a licensed facility and I got an fed tax ID on my receipt. Still just not 100% sure if I can deduct everything I paid in 2017 even though the care stretches through the 2017-2018 school year. Lots of advice so far but some of it is conflicting. So far on my taxes I've calculated how much I paid in 2017 that covers the 2017 actual care part, so I'm sure I'm safe, but I would like to deduct all I paid in 2017 if I can.

~~~~~~~~~
Empire Tri Speed Coach
USATF Coach
NYRR Distance Pacer
Dad of twins
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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Buy some TurboTax software and it will tell you.
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Re: Tax question about childcare costs [jimatbeyond] [ In reply to ]
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I'm actually using TurboTax and it doesn't tell me. Sadly.

~~~~~~~~~
Empire Tri Speed Coach
USATF Coach
NYRR Distance Pacer
Dad of twins
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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Call them.
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Re: Tax question about childcare costs [jimatbeyond] [ In reply to ]
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Called them. They said to declare the amount I paid in 2017 that covered 2017 care and deduct the part I paid in 2017 for 2018 care in 2018.

~~~~~~~~~
Empire Tri Speed Coach
USATF Coach
NYRR Distance Pacer
Dad of twins
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Re: Tax question about childcare costs [Mendeldave] [ In reply to ]
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Thanks for reporting back!
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