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We are from the government and we are here to help. Most of us would scream in fear and run the other way like Homer Simpson. Alas, the IRS is saying such words and they are actually true regarding a tax credit you can claim.

If you are hunting for tax deductions when preparing your taxes, you are looking for the wrong thing. The things you really want to find are tax credits. Tax deductions are Hondas to the Ferrari of a tax credit.

Why is the tax credit so powerful? The answer is simple. A tax credit is a dollar for dollar reduction from the actual amount of tax you owe the IRS. You deduct it from the final tax amount you would normally write a check for to the IRS.

At this point, you are probably wondering how this relates to summer camp fun for the kids. Well, most working parents send kids to summer camps. If you child is under 13, you are in for some excellent tax news.

You can claim the cost of camp as part of the child care credit. Oddly, this can only be claimed for a day camp. If the kids stay overnight, the cost does not qualify. Why this is so is very unclear.

The amount you can claim involves a bit of math and the total credit is capped at $3,000 for a single child and no more than $6,000 for two or more children. The calculation is essentially 20 to 35 percent of the cost of the camp.

The sliding scale starts at 15,000 dollars. Up to this amount, you can claim a credit of 35 percent of your cost. The percentage decreases as you make more money. It levels off at 20 percent for people making $43,000 or more.

To determine your exact percentage, you should look at the exact sliding scale the IRS publishes. It can be found in publication 503. You can order this or just pull it off the site the agency maintains.

I fully understand that thinking about taxes in the middle of summer is probably not high on your list of things to do. In this case, it should be. A tax credit is a valuable thing, so make sure to claim all you can.

Tags: Taxes