Clark Maintains a Household for Himself and His Two Dependent

question 44

Essay

Clark maintains a household for himself and his two dependent preschool children and files as head of household.For the year ended December 31, 2018, Clark earned a salary of $62,000.He paid $3,600 to a housekeeper to care for his children in his home, and also paid $1,500 to a kiddie play camp for child care.He had no other income or expenses during 2018.His tax liability before any credits is $5,011.How much can Clark claim as a child and dependent care credit, child tax credit, and additional child tax credit in 2018?

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Definitions:

Bankruptcy Code

The body of laws and provisions governing the process of bankruptcy, allowing individuals or entities to eliminate or repay their debts under the protection of the bankruptcy court.

Means Test

A method used to determine an individual's eligibility for certain types of financial assistance or legal aid, based on their income and assets.

Chapter 7

A provision under the U.S. Bankruptcy Code dealing with liquidation, where a debtor's non-exempt assets are sold and the proceeds distributed to creditors.

Chapter 13

A section of the United States Bankruptcy Code that allows individuals with a regular income to create a plan to repay all or part of their debts.