August 11, 2014 at 1:00 am

Kids older than your Scotch? No tax break

With just three weeks until Labor Day, summer is nearly over, which raises a perennial August quandary. To wit: If I haven’t slimmed down for bikini season yet, should I just throw in the thong and keep my coat of insulating fat for winter?

A look at the summer to-do list finds many untouched items. I’d drown my disappointment in one of the “exciting new summer cocktails” I saved from some magazine’s April issue, except that I forgot to plant the required supply of cucumber sprouts, papaya blossoms and sugarcane root.

Which isn’t to say I’ve accomplished nothing this summer. For example: If my list included “Sink several hundred dollars into unexpected boat repairs,” I could check that puppy right off.

To salvage some of your misspent summer’s spending, take stock of your tax situation. If you work and have kids, you’ve got a couple of tidy summertime tax breaks just waiting.

Day camp: If you put your kids in summer day camp so that you and your spouse can work, this is deductible as part of the child and dependent care credit. (Sleep-away camp isn’t, because we all know you send the kids just to go on your own vacation without juice boxes and chicken strips, which the IRS considers enough of a reward in itself.)

The trick here is that you need to provide a tax ID number for the camp provider, which rules out your sister-in-law’s play group in the basement, unless she’s willing to claim the income. The cap is $3,000 for one child, $6,000 for two or more, and you can deduct from 35 percent to 20 percent, depending on income.

Other summer child care: Also deductible if it’s so you and the spouse can work, as long as you rat out your provider to the IRS. If you use all of your child care credit, see whether your company offers a child care flexible spending account. This allows you to avoid paying income tax on money you use to pay for child care. You can’t use a flex account to pay for services you deduct under the child care credit, so max the credit out first. If you’re in a tax bracket of 25 percent or more, max out your flex allowance first (up to $5,000 a year), then use the care credit.

Go crazy on deductions

Now the bad news: If little Bernie Jr. has had his bar mitzvah, you’re out of luck. With a few exceptions, the IRS believes that once your kids hit 13 they are adults, so these tax breaks apply only to those 12 and younger. This is because every young American teen is a model citizen who can be left alone all day with no dire consequences whatsoever.

On the other hand, remember that damage to your home may be deductible as a casualty loss if you itemize your return. I have searched the tax rules for “parental sanity losses due to leaving a 13-year-old alone all day” and found nothing. However, if your mental health care pushes your total medical expenses to more than 10 percent of your adjusted gross income, that’s a writeoff, too. Just remember to ask for the 55-gallon drum of Valium.

Brian O’Connor is author of the award-winning book, “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.”
boconnor@detroitnews.com
(313) 222-2145
Twitter: @BrianOCTweet