What are the advantages of dependent care?
The benefits of dependent care are the advantage of employers who have the care of dependent persons or the tax advantage that compensates for the cost of being cared for by dependent persons while the employee works. Dependent is classified as a natural or adopted child, a parent who pays for more than 50 percent of his expenditure, or any child for whom the person has legal guardianship. The most common forms of dependent care are paid leave for dependent care, tax loans for children's care and dependent care and dependent accounts of flexible expenses. In the United States, the Family Medical Holiday Act (FMLA) says employers must allow employees to take up to 12 weeks of unpaid leave to take care of a child, either a newborn or adopted. FMLA also includes the same provisions on children's care or family members suffering from serious health problems. The law requires an employee benefit will remain in place during the 12 -week period but to employNanec still has to pay its part of the premium.
Although FMLA requires employers to allow time off, many employers provide additional dependent care in the form of paid leave. The most common advantage is for new mothers. Many employers pay for six to eight weeks of paid maternity leave so that new mothers can recover from childbirth and bond with a new child.
Tax loans for children and dependent care are another form of dependent benefits of care. The Internal Revenue Service (IRS) provides a loan that helps to compensate for the cost of paying someone to take care of the dependent person while the taxpayer works away from home. To obtain a loan, taxpayers must submit the IRS 2441 form and provide information about who they paid and how much they paid for dependent care. The loan amount is determined by the number of dependent they care about, the amount of the required income and the amount required by dependentthe schedules.
If the taxpayer requires less than approximately $ 24,000 USD (USD) per year, the tax credit form is very beneficial because it is a loan and not just a reduction in taxable income. The second form of dependent advantages of care related to expenditure is a dependent account for flexible care expenses. Some employers offer this option that works by allowing employees to be earmarked before taxation in a flexible expense account. Since dependent care expenditure arises, the employee may pay for his flexible expenditure account.
If the taxpayer decides to use a flexible expenditure account, he cannot also request a dependent tax credit because he has not paid the tax refund tax. Usually, if the taxpayer earns more than $ 24,000 per year in income, a flexible expenses account is more advantageous than a tax credit. This is because the amount that the taxpayer would obtain into the loan is lowerthan the amount he would pay for taxes for the same amount of income. By reducing taxable income through a flexible expenditure account, dependent care allow the taxpayer to cover the costs of dependent care and the amount that the taxpayer must pay for taxes.