Thank you for your response.
Considering your advice from another post (thank you again), I am leaning towards filing the child's return for better tax efficiency. In this scenario, I can claim the $5,000 Dependent Care FSA (DCFSA) on my return and an additional child care credit of ($6,000 - $5,000) * 20% = $200, as our daycare costs (excluding summer camp) are notably high. If the child's return doesn't include the summer camp deduction, the taxes would be $1,250 * 10% + $2,500 * 37%. Am I correct in this understanding?
Given that summer camp is not considered a "necessary" expense, I believe it qualifies for the UTMA income deduction. My question is, how should I report this deduction? Should it be included on the child's return?
Your guidance on this matter is highly appreciated.
