For purposes of the tax credit for child and dependent care expenses, explain th

Question

For purposes of the tax credit for child and dependent care expenses, explain the limitations concerning the amount of qualified expenses that can be used to calculate the credit.

Explain what qualifies as educational expenses for the purposes of educational tax credits.

Adrienne paid $2,900 in child care expenses so that she would be able to work. Of this amount, $500 was paid to Adrienne’s mother, whom Adrienne cannot claim as a dependent. Adrienne had net earnings of $1,900 from her jewelry business. In addition, she received child support payments of $21,000 from her ex-husband. What amount, if any, of child and dependent care credit can Adrienne claim?

What type of compensation is subject to employer withholding?

When are employees required to report tips to their employer? Are tips subject to the same withholding requirements as regular salary?

PLEASE PROVIDE NEW ANSWERS!!

Explanation / Answer

Followings are the limitation concerning the amount of qualified expenses that can be used to calculate tax credit:

Based on the above conditions the amount of child and dependednt care credit Adrienne can claim is as follows :

Total income = $1900 + $21000 = $22900

Percentage applicable = 35% - 4% = 31%

Amount of Credit = $2900*31% = $899

Following Compensations are subject to employer withholding

Employees must report tips to the employer by the 10th of the month after the month the tips are received.

Yes tips are subject to the same withholding requirements as regular salary.

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