Some camp fees do qualify for tax deduction
I sent my children to summer camp last month and
want to know if I can take a deduction for the child care credit for the amount
I spent on the camp. The camp lasted for two weeks and the fee for the camp
included all food, lodging, and activities.
There's summer camp, and then there's summer camp. I'm afraid the summer camp costs you paid are not eligible for the child care credit, because the camp is an overnight-type camp. That is not to say that all camp costs are disqualified from this credit. Costs for day camps qualify for the credit.
If you plan to claim a child care credit for costs of summer day camps for your dependent, you should contact the administration office of the day camp and ask for the Federal Identification Number of the organization sponsoring the camp. You will need this number when you claim the credit on your tax return. Next April, get a copy of 2441, Child and Dependent Care Expenses, and attach the filled-out form to your income tax return.
I borrowed money to pay for a new car. I'm told
the interest on such a loan is no longer deductible, but what if the car is used
in my business' is the interest allowed as a business expense?
Yes, the car interest is deductible if the car is used in the business. You must file an appropriate business tax return (Schedule C or Schedule F, for example), in order to claim the deduction. If the car is not used entirely for business, the interest deduction must be prorated. For example, if a car is used 40% for business, only 40% of the interest is deductible on the business part of the tax return.
Is there a limit on the amount of cost I can
deduct for travel to and from my doctor's office and clinic?
The rule is that you can deduct the cost of transportation to and from medical care facilities, including doctor's offices, hospitals, clinics, and labs. You can add up the miles you drive to and from these places and deduct 10¢ per mile. Or, you can keep track of the actual expenses you incurred and deduct those expenses instead. If you use the 10¢ per mile rule, you can add the cost of parking and tolls to the mileage calculation. There doesn't seem to be a limit on the amount you can deduct, but the IRS always has the right to examine the numbers on your tax return and determine what they think is reasonable. If you hire a private jet to transport you to your doctor's office across town, where public transportation and automobile traffic proliferates, that cost might not be considered reasonable. If, on the other hand, you hire a dogsled team to haul you to the nearest doctor, across the frozen tundra in Alaska, it seems the cost would be perfectly appropriate.
As with anything tax-ish, you should be prepared to back up your deduction with plenty of receipts and good excuses. If you want to deduct mileage, be sure to keep a record of all the times you went to see the doctor or traveled to the medical facilities. Include the date of your trip, the number of miles, the destination, and the reason for going. Driving to the doctor's office to have lunch with the nurse who happens to be your fiancé probably won't qualify you for a medical mileage deduction.
If I turn over to charity the money I earned at
a recent speaking engagement, can I take a deduction for the contribution?
Absolutely, if you itemize you are entitled to a deduction for the amount of the contribution. But, on the down side, you must report the amount you earned as income. This produces a particularly unfortunate tax result if you are in a situation in which you are not entitled to itemize deductions. You still have to claim the earnings as income, but you get no offsetting deduction for the contribution.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.