Purpose:

Research and communicating information are important skills to have in tax. The research assignments are to provide students with an opportunity to enhance their research skills, increase their knowledge, apply what it is learned, and communicate that information thoughtfully, concisely, and professionally.

Instructions:

You are a research assistant in a tax office and have been asked to prepare a memo to a partner based on the problem provided below.

PROBLEM:

Ashby and Curtis, married professionals, have a two$-$year$-$old son, Jason. Curtis works full$-$time as an electrical engineer, but Ashby has not worked outside the home since Jason was born. Because Jason is getting older, Ashby thinks that he would benefit from attending nursery school several times a week, which would give her an opportunity to reinvigorate her love of painting at a nearby art studio. Ashby thinks that if she is lucky, the proceeds from the sale of her paintings will pay for the nursery school tuition.

Ashby plans to claim the credit for child and dependent care expenses, because the care provided Jason at the nursery school is required for her to pursue her art career. Can Ashby and Curtis claim the credit for child and dependent care expenses for the nursery school expense? Why or why not?

QUESTION:

$1.$Explain tax credits in general.

$2.$Explain the credit for Child and Dependent Care Expenses $($this is not the dependent credit, but the dependent care expense credit, they are different$).$

$3.$Analyze the couples situation for why the may or may not qualify for the credit.