Question
Your friends, Bob and Carol, have hired a child care provider (Dolores) to come into their home for three hours a day to care for
Your friends, Bob and Carol, have hired a child care provider (Dolores) to come into their home for three hours a day to care for their child while they both are at work. Dolores charges $2,400 for her services for the year. Bob and Carol have learned that up to $3,000 of qualifying expenditures will generate a credit for child and dependent care expenses and that qualifying expenditures can include payments for housecleaning services. As a result, they ask Dolores whether she would be interested in working several hours more per week, after Bob returns from work, for the sole purpose of cleaning the house. Bob offers to pay $600 for the additional work, and Dolores seems interested. For Bob and Carol, the net cost of the additional services would be $480 [$600 ($600 20%)] due to the availability of the credit for child and dependent care expenses. You learn of Bob and Carols opportunity, but you think it is unfair. If you hired Dolores to perform similar housecleaning services, your net cost would be $600, not $480, because you do not qualify for the credit. You are not sure that Bob and Carol should take advantage of the system in this way. How do you suppose Bob and Carol will feel, or should feel, about this abuse if you approach them about it?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started