Reduce Your Taxes with the Child Care Tax Credit

If you paid someone to care for a person in your household last year while you worked or looked for work, then you may be able to take the Child and Dependent Care Tax Credit and reduce the amount of tax owed.

Here are 12 facts you should know about this important tax credit:

  1. Child, Dependent or Spouse. You may be able to claim the credit if you paid someone to care for your child, dependent or spouse last year.
  2. Work-related Expenses. Your expenses for care must be work-related. This means that you must pay for the care so you can work or look for work. This rule also applies to your spouse if you file a joint return. Your spouse meets this rule during any month they are a full-time student. They also meet it if they’re physically or mentally incapable of self-care.
  3. Qualifying Person. The care must have been for “qualifying persons.” A qualifying person can be your child under age 13. A qualifying person can also be your spouse or dependent who lived with you for more than half the year and is physically or mentally incapable of self-care.
  4. Earned Income Required. You must have earned income, such as from wages, salaries and tips. It also includes net earnings from self-employment. Your spouse must also have earned income if you file jointly. Your spouse is treated as having earned income for any month that they are a full-time student or incapable of self-care. This rule also applies to you if you file a joint return. Please call if you have any questions about what qualifies as earned income.
  5. Credit Percentage / Expense Limits.The credit is worth between 20 and 35 percent of your allowable expenses. The percentage depends on the amount of your income. Your allowable expenses are limited to $3,000 if you paid for the care of one qualifying person. The limit is $6,000 if you paid for the care of two or more.
  6. Dependent Care Benefits. If your employer gives you dependent care benefits, special rules apply. For more information about these rules, please call the office.
  7. Qualifying Person’s SSN.You must include the Social Security Number of each qualifying person to claim the credit.
  8. Keep Records and Receipts. Keep all your receipts and records for when you file your tax return next year. You will need the name, address and taxpayer identification number of the care provider. You must report this information when you claim the credit.
  9. Form 2441. File Form 2441, Child and Dependent Care Expenseswith your tax return to claim the credit.
  10. Joint Return if Married. Generally, married couples must file a joint return. You can still take the credit, however, if you are legally separated or living apart from your spouse.
  11. Don’t overlook vacation and summer camps.Day camps are common during the summer months. Many parents pay for day camps for their children during school vacations while they work or look for work. If this applies to you, your costs may qualify for a federal tax credit that can lower your taxes.
  12. Certain Care Does Not Qualify.You may not include the cost of certain types of care for the tax credit, including:

We at Schaumburg CPA offer a complete range of International Taxation, Tax and Consulting Services. We are here not only to understand your needs but excelling on solutions to satisfy your needs. We are staying on top of current law changes and developing new relationships on a daily basis to serve your needs. Manendra Kothari is qualified Chartered Accountant from India and qualified and licensed CPA from US. .

Overnight camps or summer school tutoring costs.

Care provided by your spouse or your child who is under age 19 at the end of the year.

Care given by a person you can claim as your dependent.

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Best CPA and tax preparation services in Chicago

Everybody fears charge time. The procedure is all the more troublesome when one has not found a trusted bookkeeper to work with. Finding a CPA, evaluator, or clerk is a standout amongst the most vital and testing errands confronting both people and little entrepreneurs. It can have the effect between completing your duties rapidly and being screwed over thanks to a review. The procedure is all the all the more difficult due to the sheer number of bookkeepers to look over. For instance, there are numerous a huge numbers of bookkeepers in Chicago alone.

CPA in Chicago, who work with people and little entrepreneurs as a rule work alone or at little firm since people and little entrepreneurs don’t have a brand to depend on while picking a bookkeeper, perusing surveys and getting suggestions are particularly critical. Getting a thought of the bookkeeper’s instructive foundation and experience, the amount of time he can give to your case, whether his run of the mill customers have assess needs that are as mind boggling as yours, and whether he is acquainted with prevalent little business bookkeeping programming, for example, QuickBooks are particularly critical. Our Indian CPA in Chicago branch offers accurate calculation of the IRS Audit without committing any technical errors all over the USA.

Determining the status of a bookkeeper’s expert capabilities is particularly imperative as review the CPA’s evaluations. See whether the CPA is an individual from the American Institute of Certified Public Accountants (AICPA) and their state bookkeeping society, for instance the Illinois CPA Society and the Independent Accountants Association of Illinois. The Chicago Bookkeeping service provider serves as per the best interest of clients.

While asking the above inquiries are basic to finding the right bookkeeper, there are not very many assets where potential customers can get target answers. Online indexes and telephone directories just give the bookkeeper’s contact data and potentially a paid commercial that give no valuable autonomous data. Numerous sites indicate to give a rundown of “top bookkeepers” that potential customers can contact by rounding out a structure and uncovering their telephone number and address. Be that as it may, these locales regularly require the bookkeepers to pay a charge to be recorded and don’t do any work to qualify the individual as a “top bookkeeper.” Furthermore, potential customers are revealing so as to welcome spontaneous interchanges from the bookkeepers their telephone number and email. We understand the importance of Tax Preparation Service and don’t compromise on the quality of our service. The professionals give full time to your work and you can expect to get the best results.

Potential customers ought to look for a target, free site that gives audits, appraisals, and suggestions for bookkeepers. The site ought to have an expansive rundown of bookkeepers; permit potential customers make inquiries of a bookkeeper without uncovering their email or other private data, and permit clients to ensure their security when composing surveys.

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Business Tax Planning Service in Schaumburg

Charge arranging is the procedure of taking a gander at different assessment alternatives keeping in mind the end goal to decide when, whether, and how to direct business and individual exchanges to lessen or dispense with expense risk.


Numerous little entrepreneurs overlook charge arranging. They don’t consider their assessments until it are an ideal opportunity to meet with their bookkeepers, however charge arranging is a progressing process and great duty counsel is profitable merchandise. It is to your advantage to survey your pay and costs month to month and meet with our Indian CPA or charge counselor quarterly to examine how you can exploit the procurement, credits and reasoning that are legitimately accessible to you.


Despite the fact that assessment shirking arranging is legitimate, charge avoidance – the decrease of expense through double dealing, subterfuge, or camouflage – is most certainly not. Every now and again what separates charge avoidance from assessment shirking is the IRS’s finding that there was deceitful expectation with respect to the entrepreneur. The accompanying are four of the ranges the Schaumburg IRS audit inspectors ordinarily concentrate on as indicating conceivable misrepresentation:


  • Failure to report generous measures of pay, for example, a shareholder’s inability to report profits or a store proprietor’s inability to report a segment of the everyday business receipts.


  • Claims for invented or despicable findings on an arrival, for example, a business agent’s significant exaggeration of travel costs or a citizen’s case of an extensive derivation for beneficent commitments when no check exists.


  • Accounting anomalies, for example, a business’ inability to keep satisfactory records or an inconsistency between sums covered a company’s arrival and sums gave an account of its money related proclamations.


  • Improper designation of salary to a related citizen who is in a lower assessment section, for example, where a company makes appropriations to the controlling shareholder’s youngsters.


Charge Planning Strategies


Incalculable assessment arranging techniques are accessible to little entrepreneurs. Some are gone for the proprietor’s individual assessment circumstance and some at the business itself, however paying little heed to how straightforward or how complex an expense methodology is, it will be founded on organizing the procedure to fulfill one or a greater amount of these regularly covering objectives:


  • Reducing the measure of assessable salary


  • Lowering your assessment rate


  • Controlling the time when the assessment must be paid


  • Claiming any accessible assessment credits


  • Controlling the impacts of the Alternative Minimum Tax


  • Avoiding the most well-known assessment arranging botches


So as to arrange adequately, you’ll have to assess your own and business wage for the following couple of years. This is fundamental since numerous assessment arranging procedures will spare duty dollars at one salary level, yet will make a bigger expense bill at other pay levels. You will need to abstain from having the “right” duty arrangement made “wrong” by incorrect salary projections. When you recognize what your rough wage will be, you can make the following stride: assessing your duty section.

The push to think of gem ball evaluations might be troublesome and by its exceptionally nature will be vague. Then again, you ought to as of now be anticipating your business incomes, salary, and income for general business arranging purposes. The better your evaluations are, the better the chances that your expense arranging endeavors will succeed.

Expanding Business Entertainment Expenses

Diversion costs are genuine reasonings that can bring down your assessment charge and spare you cash, if you take after specific rules.

With a specific end goal to qualify as a finding, business must be examined some time recently, amid, or after the dinner and the surroundings must be helpful for a business dialog. Case in point, a little, calm eatery would be a perfect area for a business supper. A club would not. Be cautious of areas that incorporate progressing floor appears or other diverting occasions that repress business dialogs. Prime diversions are theater areas, ski trips, greens, sports occasions, and chasing trips.

The IRS permits up to a 50 percent reasoning on excitement costs, however you should keep great records and the business supper must be masterminded with the motivation behind leading particular business. Bon craving!

Imperative Business Automobile Deductions

On the off chance that you utilize your auto for business, for example, going by customers or going to conferences far from your customary working environment you might have the capacity to take certain reasoning’s for the expense of working and keeping up your vehicle. You can deduct auto costs by taking either the standard mileage rate or utilizing real costs.

The mileage repayment rates for 2016 are 54 pennies for each business mile (57.5 pennies for each mile in 2015), 14 pennies for each altruistic mile (unaltered from 2015) and 19 pennies for moving and restorative miles (down from 23 pennies for every mile in 2015).

In the event that you possess two autos, another approach to expand findings is to incorporate both autos in your derivations. This works since business miles driven is dictated by business use. To figure business use, partition the business miles driven by the aggregate miles driven. This technique can bring about huge derivations.

Whichever technique you choose to use to take the reasoning, dependably make certain to keep precise records, for example, a mileage log and receipts. On the off chance that you require help making sense of which system is best for your business; don’t dither to get in touch with us. Glad driving!

Build Your Bottom Line When You Work At Home

The home office conclusion is potentially a standout amongst the most troublesome reasonings ever to come around the piece. Yet, there are such a large number of duty focal points it gets to be justified regardless of the navigational inconvenience. Here are a couple of regular tips for home office findings that can make charge season altogether less traumatic for those of you with a home office.

Attempt conspicuously showing your home telephone number and address on business cards, have business visitors sign a visitor log book when they visit your office, deduct long-separation telephone charges, keep a period and work action log, hold receipts and paid receipts. Keeping these receipts makes it such a great amount of less demanding to decide rates of derivations later on in the year.

Area 179 expensing for assessment year 2016 (as in 2015) permits you to quickly deduct, as opposed to devalue after some time, up to $500,000, with a top of $2,000,000 worth of qualified business property that you buy amid the year. The watchword is “buy”. Hardware can be new or utilized and incorporates certain product. All home office depreciable gear meets the capability. The “Reward Depreciation” for qualified resources (new hardware just – no utilized gear and no product) put in administration for expense years 2015, 2016, and 2017 is 50 percent. In 2018, it is diminished to 40 percent and in 2019 is decreased to 30 percent.

Our Schaumburg Tax Preparation services are proper and complete with full clarity. We deliver individual attention to all our clients and understand the ratio of customer satisfaction. We also service in the Schaumburg 1040 preparation and have grown to be among the leaders in CPA in Schaumburg.

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Indian CPA firm in Schaumburg

Manen Kothari CPA is of an Indian Origin and gives Indian CPA administrations to both Indian and US customers. Our office is situated in Fremont CA yet we work with customers from around the world. You may be searching for an Indian CPA in light of the fact that you feel good working with somebody talking your dialect. Our office is staff with persons of Indian Origins who talk different Indian Languages. While others like working with Indian CPA fundamentally because of trust. Some of our customers work with us while moving to India or moving from India. Some of our customers searching for Indian CPA are Indian Business Owners.

 Some of the common services customers looking from an Indian CPA are:


  • FBAR Filing (Forign Bank Account Reporting)
  • Indian Bank Account/Income Consultation
  • Consultation For Moving Assets, Money or Income From India.
  • Consultation for setting up a company in United States.
  • Tax Filing and Tax Audit Representation.


Office of Manen Kothari CPA is situated in Fremont CA. We additionally do telephone discussion and video-gatherings for our worldwide customers. Our office can deal with both Business and Individual Tax and bookkeeping needs. We can file your state and federal tax returns, process payroll service, and provide tax audit services.   You can find lots of current tax and accounting information on our website but you can also send us your message via home page or call us for phone or in-person appointment.




Our office can offer you some assistance with setting up the business in United States. You don’t need to be a US Citizen or Resident to begin a business in United States. We can set up a Corporate Structure, Filing appropriate paper work and expenses and process your finance.


Manen Kothari CPA is also a Certified Accountant (CA) from India.  Our Indian CPA services include the setting up of business, moving funds and filing the taxes.  Manen is available for the consultant via phone and email. You can contact him online.

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