IRS ISSUES REMINDER ON CHILD TAX CREDIT

Working parents should be aware that the child and dependent care tax credit is available to offset some of the expenses for child care. Six facts the IRS wants taxpayers to know about the credit:

● Children must be under age 13 to qualify for the credit.

● The credit applies whether the childcare provider is a sitter at home or a daycare facility.

● The credit applies for up to $3,000 of expenses for one child and up to $6,000 for two or more.

● The credit can be up to 35% of qualifying expenses, depending on your income.

● Overnight camps don't qualify; day camps do.

● Keep receipts for expenses, and get the employee ID number of the care giver.

SUMMERTIME TAX TIP

If you itemize your deductions, you can deduct the mortgage interest and property taxes paid for your vacation home. A boat or RV can qualify as a vacation home if it has sleeping quarters, cooking facilities, and a bathroom. If a retreat also serves as rental property, you can control your tax deductions by changing the number of days you use it for vacation.

EVERY ESTATE PLAN SHOULD HAVE THESE BASIC DOCUMENTS

Estate planning is not just a task for the wealthy. Even though federal tax implications kick in only if your estate exceeds $5,430,000, there are other issues that make estate planning important for most individuals.

ROTH IRAs: A SMART TAX IDEA FOR CHILDREN

Persuading your working children to make retirement contributions may not be easy, but investments in Roth IRAs may be the wisest possible use of their earnings.

UNDERSTAND THE PROS AND CONS OF DRIPS

Appropriately enough, investors may notice a slow trickle in earnings from "dividend reinvestment plans" (DRIPs). But, these investments may end up providing a steady stream of income over the long run.

JUNE 15 FILING DATE FOR U.S. CITIZENS ABROAD

U.S. citizens and resident aliens living overseas or serving in the military outside the U.S. have a June 15, 2015, deadline for filing their 2014 income tax returns. Taxpayers using this automatic two-month extension for their 2014 filing must attach an explanation to their return that states whether they live overseas or serve in the military outside the country.

IRS TAX AUDITS CUT BY BUDGET ISSUES

The IRS reports that its enforcement budget has been cut by $254 million, a 5% reduction from the previous year. As a result, the Agency expects to cut the number of individual and business audits it conducts. In 2014 the IRS audited 0.86 percent of individual taxpayers and 26% of large corporations. Though audit statistics show a decline in examinations, the IRS contacts many more taxpayers with questions about their returns. Once statistics include these taxpayer contacts, the 2014 return examination rate is closer to 4% or one in every 25 returns filed.