Summer Day Camp Expenses May Qualify for a Tax Credit
With children on summer vacation, extra expenses arise, including summer day camp. The Internal Revenue Service has added summer day camp expenses to help you qualify for a tax credit. For children that are under 13 years old, most parents have to arrange some form of day care. Some things that the IRS wants parents to know about the tax credit that is available for these expenses are as follows.
The Child and Dependent Care Credit is offered for expenses that occur during the school year and summer time. The price of the camp can count towards the child and dependent care credit. However, the costs for overnight camps do not count towards the credit. It does not matter if your childcare provider is a sitter at your house or a daycare facility, you will qualify for a tax benefit if you are eligible for the credit. The tax credit can be up to 35% of qualifying expenditures, depending on your annual income. Up to $3,000 of the unreimbursed expenses for one individual or $6,000 for two or more individual may be used to figure the credit. Look at IRS Publication 503, Child and Dependent Care Expenses for additional information.
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Do not make the stresses of a home disaster worse by having to reconstruct vital records and account for your possessions. The IRS encourages individuals to preserve their tax and financial records before a disaster hits. There are some simple tips for taxpayers preparing for a catastrophe. 
Many students have started summer jobs now that school is out. The IRS is sending a little reminder to these students that some of the money must be withheld by your employer for taxes. When first starting out a job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate, which is used to determine the money withheld from each paycheck. Also make sure that each employee is withholding the correct amount of taxes if you have more than one summer job. If you receive tips, remember that they are subject to federal income tax. Even money earned from odd jobs, such as baby-sitting and lawn jobs, are subject to federal income tax. If you are self-employed and have net earnings of $400 or more, you will have to pay self-employment tax to pay for your Social Security benefits. The self-employment tax can be figured on Form 1040. Food and lodging payments to ROTC students involved in advanced training are not taxable, but active duty pay during summer advanced camp is taxable. There are special rules if you are a newspaper carrier or distributor. If you are in the business of delivering newspaper, your entire pay relates to services instead of hours worked, and you execute services under a written contract then you are a direct seller and will be treated as self-employed for income tax purposes. 
If you have a special-needs child who is developmentally disabled and/or incapacitated, then your child might be receiving government support, for example Medicaid or Supplemental Security income. Many of these government programs have asset and/or income tests. If during your lifetime, you gift money to your special-needs child or leave property outright through your will or revocable living trust after your death, your child will immediately be disqualified from their government benefits. But if you leave the child’s inheritance in a special-needs trust, it will not be counted against your child for his or her government benefits. 
While same-sex couples can get married in the District of Columbia and five states, they are still unable to file a joint federal tax return, share their retirement benefits, protect each other’s assets from estate taxes, or benefit from multiple tax breaks provided through federal law. Because of this, married same-sex couples must do more financial planning than individuals who are not married. In 2008, there were about 565,000 same-sex couples across the United States, including an estimated 32,000 who were married. 
Like many, Don Spivack never planned to retire early, but planned to remain in his career and continue doing work he viewed as important. Retirement packages and pensions were offered according to individuals by age and seniority. The retirement offers were generous, and the agency would begin to lay off people if not enough accepted the proposal offered. Not wanting to take the chance to be in the group of individuals to be let go, he begrudgingly accepted the offer and retired. 
Receiving a gift of stock from a family member can become difficult when you decide to sell it. The tax on capital-gains due from the sale of stock is determined on what the original owner paid for the shares, along with mergers, spinoffs and stock splits that may have occurred since the purchase. Sometimes, however, finding the original basis can be made more difficult with time. Inheriting shares is significantly easier because the basis of the stock is based on the stock value at the time the individual who bequeathed it died. To solve the mystery of the original basis of stock, look at family archives for original investment statements. The library or internet may even have some clues. Even a copy of an original bank statement showing the amount the shares were purchased may help in some cases. If you plan on gifting shares of stock, make sure to give the cost-basis information too. 
Summer can still be a relaxing part of the year, even without the summer breaks from school. People take vacations, leave work early, and business is slower when it comes time for summer. This makes summertime the time to clean up finances and make some long-term plans for straightening out your business and life. Consolidating your investment accounts is one of the biggest moves you can make to save money. You could be at a disadvantage by having multiple investment accounts. Diversifying your portfolio is what you are always told when investing. However, your portfolio needs different types of investments, not just a variety of investments, to be able to focus. Another way having too many accounts will harm you has to do with not being able to monitor their investments. Consolidating makes it easier to keep track of what is happening with the investments you own. Make sure to have plenty of insurance in both your personal and professional life. You should also take the time to get all your paperwork signed, notarized, and put in a place easily accessible to others if you are unable to do so. Providing a will, a power of attorney, and a living will or medical directive are important for both personal and professional reasons. So while summer can be an enjoyable time, take advantage of the extra time and prepare for the future. 
Congress allowed individuals to transfers their IRA account or 401(k) to a Roth IRA last year without the restriction that barred the conversion to those earning $100,000 or less. Individuals are allowed to give up to $5 million to their grandchildren without encountering the generation-skipping tax. The exemption is planned to end in 2013. Grandchildren will benefit more from a Roth IRA due to a longer life expectancy than a child. Due to the fact that Roth holders are not required to take distributions after the age of 70.5, the Roth IRA is the best way to save assets for their successors. Individuals are not required to pay income taxes on assets moved from another retirement account. Congress may end this estate-planning option before 2013, so take advantage of this deal while you can. 
For most individuals, there are several documents that make up an elder law estate plan to avoid probate, protect assets from nursing home costs, keep belongings in the family, save estate taxes, and select people to make decisions if you are disabled. The main instruments of a plan are: a revocable living trust or irrevocable Medicaid asset protection trust, inheritance trust, “pour-over will”, power of attorney, health-care proxy. You may also leave funeral and burial instructions and final directives for your family to inform them about all your important information. A memorandum of personal effects asserts which personal effects are passed to beneficiaries. A new deed is created to change title if real property is being transferred to the name of the trust. While having an elder law estate plan is important, it is also important to make sure you have it reviewed at least every three years to maintain accuracy and legality. 
