Key expenses to document for common tax credits:
Child Tax Credit
While primarily based on dependents’ eligibility, maintain:
- Proof of relationship (birth/adoption certificates)
- Residency documentation (school records/medical bills)
- Financial support records (if sharing custody)
Note: This credit isn’t expense-based but requires dependency verification.
Child and Dependent Care Credit
Document care-related costs for children under 13 or disabled dependents:
- Daycare/preschool invoices
- Babysitter/nanny payments (with provider’s SSN/EIN)
- Summer/day camp fees (except overnight camps)
- After-school program costs
Covers up to $3,000 for one dependent/$6,000 for two+.
Adoption Credit
Keep adoption process expenses:
- Court/legal fees
- Travel expenses (meals/lodging for adoption trips)
- Agency fees
Up to $16,810 per child, phase-out starts at $252,150 AGI.
Education Credits
American Opportunity Tax Credit
Save higher education expenses:
- Tuition statements (Form 1098-T)
- Course materials receipts (books/equipment)
Covers $2,500 annually for first 4 years of college.
Lifetime Learning Credit
Document post-secondary costs:
- Part-time student expenses
- Vocational training fees
Up to $2,000/year with no degree requirement.
For all credits, retain IRS-required forms (e.g., W-10 for care providers) and income documentation (W-2s/pay stubs) to verify eligibility thresholds. Use tax software or Form 2441 (for childcare) to report these expenses.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-expenses-i-need-to-document-for-the-tax-credit/
