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Small Business Tax Q&A: October ’17

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in Small Business Tax

Back to school on tax credit

Q. In an article, you talk about the dependent care credit if one spouse is a student. Are there any other limits in this instance? E.H., New Haven, Conn.

A. Yes. As we stated, qualified expenses can’t exceed your earned income (if single) or the earned income of the lower-earning spouse. If one spouse is a student, the IRS treats the earned income of the student spouse (i.e., the lower-paid spouse) as being $250 per month for one child and $500 per month for two or more children. For example, if a spouse attended school year-round, the deemed amount of earned income would be $6,000 for two or more children.

Tip: The dependent care credit might be affected by tax reform legislation.

Still working late in life

Q. You mention that you don’t have to take RMDs if you are still working full time. Is this for real? J.M., Ft. Lauderdale, Fla.

A. Yes, this is for real. Normally, you must begin taking...(register to read more)

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