Deductible Child Care Expenses
April 9th, 2010
Question: What could be some reasons why my tax refund went from $3500 last year to $600 this year?
The only thing that changed is last year I got to claim the first time homebuyers credit and this year I obviously did not. I also expected it to be higher cause I paid a lot more in child care expenses than the previous year, which is tax deductible.
Answer: The first time homebuyers credit was new for 2008, it was not available on your 2007 return, so that can’t be causing the difference.
Are you sure your entered all you deductible home ownership things like mortgage interest, property taxes, points, and possibly PMI?
On the childcare expenses I suggest double checking your kids are showing up as dependents. Up to $3000 per kid can be used to calculate the deduction (but only up to $6000).
Hope that helps.
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