A New Year brings so many new opportunities to think about...taxes. I know the subject is usually anxiety-inducing and sleep-reducing, but who was it that claimed taxes are one of life's only certainties? (Let's all hope none of us face the other of life's certainties this year). And with the benefit of some useful information and planning, tax time can be made somewhat less stressful year, and for years to come.

Of course, we all worry about receiving a sizeable end-of-the-year tax bill, so it's important to know all the credits that you can claim. You are actually entitled to receive many credits you may not already know about. For instance, this year you may want to learn more about the Child and Dependent Care Credit. It's simple: If you paid someone to care for a child or a dependent so you could work or look for work, you may be able to reduce your tax by claiming this credit. It's a percentage of the amount of work-related child and dependent care expenses you paid to a care provider, up to 35% of your qualifying expenses, depending upon your income. There is a limit to what you can claim, though: up to $3,000 of the expenses paid in a year for one dependent, and up to $6,000 for two or more dependents. In order to determine whether you qualify to claim the Child and Dependent Care Credit, and since there are some further restrictions on the amount you can claim if you received dependent care benefits from your employer, I urge you to check out the IRS Tax Tip Bulletin on the subject: (http://www.irs.gov/newsroom/article/0,,id=106189,00.html). Or, for a better explanation, take a look at Breedlove's site (http://www.breedlove-online.com/benefits_savings.html).

It can also help to do some tax planning now to ensure even greater tax savings in upcoming years. For example, Breedlove suggests that you look into setting up a Dependent Care Account with your company. Many companies allow employees with child or dependent care expenses to contribute up to $5,000 of their pretax earnings to an individual Dependent Care Account. That money is then used to cover dependent care expenses, tax-free.

And while you're in the HR office, I suggest you look into whether your company offers corporate emergency backup care services as part of its benefits package to its employees. Now might be a great time for you to enroll for this service which provides child care in case of immediate need, such as a child who's mildly ill but too sick to return to school for the day, or for circumstances of which you may be aware in advance, such as school holidays or a caregiver who will be on leave. This service is really of great benefit to employers, protecting them from a labor drain on those days when their employees' kids are all home from school. More and more companies, in fact, are now coming on board with corporate emergency backup care to help attract female executives, decrease absenteeism, and increase retention. If your employer does not currently offer this benefit, it might be a great idea to make a pitch to your company. MBF can provide you with a proposal once you've connected with the right person in your organization. Your co-workers will no doubt be happy that you did!

Happy New Year!

Kathy Dupuy
President, MBF Agency