Tax deductions may be hidden in gifts

February 23, 2009 5:31:08 PM PST
If you give a gift to your child care provider, you may have an extra tax deduction coming.

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Although there is an emotional tie with your child care provider, the government sees it more as a financial arraignment and because of that a gift can be tax deductible.

"If they gave cash or a gift card or something that is easily converted into cash they can treat that as payment for child care services, take a tax deduction and use it to receive their dependent care credit," Alison Jacks said. Jacks is an enrolled agent, a tax professional registered with the IRS.

If the item is a material gift, a platter, clothing that type of thing, then the gift is not tax deductible.

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