Child Care Tax Credit
Entrepreneurs are busy people. Managing day to day operations and business development in addition to spending time with your family can be challenging. Luckily the IRS is there to help ease this burden through the Child and Dependent Care Credit, which allows you to deduct certain child care expenses. If you made a payment to someone to take care of your qualifying dependent you may be eligible for this credit on your individual federal Form 1040. In 2020, the tax credit for child in your household 17 and younger at the end of the tax year is $2,000. The tax credit for dependents older than 17 is $500. This means your tax liability is reduced by the total amount of your tax credit, which is more valuable than a tax deduction.