From our friends at Breedlove and Associates . . .

THE FLEXIBLE SPENDING ACCOUNT WINDOW

Summertime is upon us. Since more babies are born in the summer than any other season, it's a good time to share a very simple tip that can save new parents up to $1,700.

The Situation

A couple gave birth to a baby boy on July 3, 2011. In mid-July, they began searching for a nanny so the mom could go back to work after Labor Day. With about 2 weeks to spare, they found the perfect nanny.

When the mom went back to work, she learned that they had missed out on a major tax break.

The Law

Families with childcare expenses are entitled to tax breaks to help offset some of the costs of care. (There is no income restriction on the childcare tax breaks so everyone qualifies -- as long as the children are under age 13 and both spouses are working, looking for work or full-time students).

The most lucrative childcare tax break is the Dependent Care Account (commonly called a "Flexible Spending Account" or "FSA"). FSAs are federal tax breaks offered through business employers as an benefit to their employees. If either one of the spouses has access to an FSA through their company, the family will be able to pay for up to $5,000 of childcare expenses using pre-tax dollars. That means the family has no taxes on that portion of their income, which will save them between $2,100 and $2,300 per year, depending on their marginal tax rate.

Enrollment in the FSA is limited to once a year (most companies offer open enrollment in the fall for the subsequent tax year). However, there is a 30-day window after a "life-changing event" (i.e. birth of a child) when the family can enroll immediately -- allowing them to take advantage of this tax break during the current tax year.

When families don't have access to a Flexible Spending Account (or miss the 30-day window enrollment opportunity), they can utilize the Child and Dependent Care Tax Credit when they file their federal income tax return. This tax credit allows families to itemize up to $3,000 per child per year (maximum of $6,000 per year). After the 20-35% tax credit is applied to those expenses, most families will save $600 per year if they have one child and $1,200 per year if they have 2 or more children.

The Outcome

• Because the family missed the 30-day window for life-changing events, they were not able to enroll in their FSA program for the 2011 tax year, and therefore, missed out on $2,300 in savings.
• Instead, they had to settle for the Child and Dependent Care Tax Credit using Form 2441 when they filed their federal income tax return. The tax credit saved them $600 in 2011.
• The difference between the two tax breaks for this family was $1,700 ($2,300 - $600). That $1,700 in extra tax breaks would have paid for a lot of diapers! 

How It Could Have Been Avoided

Unfortunately, this story is extremely common. As first-time parents become first-time employers, there is a lot of new information to process. During this busy stage of life, families need expert guidance and support throughout the nanny search and hiring process. Without it, oversights, mistakes and missed opportunities happen regularly -- especially in the tedious and complex world of household employment tax and labor law.

As a remedy, Breedlove offers a New Employer Orientation free of charge. This 10-minute no-pressure, no-obligation phone call allows a Breedlove household employment expert to assess the family's unique situation and provide expert guidance on all the tax and labor law issues that will come into play for them. Whether they decide to use their "nanny tax" service or not, this guidance will likely save thousands of dollars and dozens of hours.

888-BREEDLOVE (888-273-3356)

www.myBreedlove.com

July 4th - Activity Ideas

July 4th brings with it lots of fun ideas for art projects, crafts, food, outdoor activites and games. Here are a number of links that will bring you to websites briming with great holiday and summer ideas!

http://familyfun.go.com/4th-of-july/
http://holidays.kaboose.com/july-4/
http://www.dltk-kids.com/usa/
http://www.enchantedlearning.com/crafts/july4/
http://www.apples4theteacher.com/holidays/fourth-of-july/
http://www.artistshelpingchildren.org/4thfourthofjulypatrioticartscraftsideaskids.html
http://www.marthastewart.com/359178/fourth-july-kids-activities

Summer Safety Tips

Sun and Heat

Cumulative sun damage can come from both UVA and UVB rays. Choosing a sunscreen with a SPF of 30 or more is recommended. Apply 20 to 30 minutes before exposure and reapplying frequently, especially after time in the water, is strongly recommended. Don’t rely on the use of waterproof sunscreen to keep working for you after water play – to be safe simply reapply.
Wear clothing that is light weight, but also provides good coverage on exposed skin. This is especially important for infants and toddlers. Hats with brims or visors that shade the face (and neck if possible) are important summer “equipment.” We can all benefit from smart summer clothing choices. Avoid prolonged exposure during peak sun hours of 10 AM to 4 PM. When playing outdoors make sure shade is available to everyone.
Good hydration is vital at all times but especially true during the summer. Offer children drinks before heading out to play and plan on several drink breaks while outdoors. Serving beverages at moderate temperature promotes greater fluid intake. Fruits, vegetables, soups and popsicles have high water content which can supplement fluid intake. Don't rely in sugary drinks for all beverage options. Encourage plenty of water. Water can be flavored with fresh fruits or veggies by floating them in a pitcher with ice water.

Insects

Wearing protective clothing, especially in areas that are bushy, woody or wet will help to limit use of insect repellents. The most effective repellent contains DEET, but should not exceed 10% of ingredients. There are other options such as peppermint oil, vinegar and citronella oil. Whatever repellent you choose children under 2 months should not have repellent on their skin. There are options for repelling insects outdoors other than using a repellent on the skin.
Bright colors, sweet drinks and food attract bees and wasps. When out at summer activities be aware of areas where bees congregate in large numbers (trash containers, food and drink stands, etc.) and avoid those area if possible. If a sting should occur remove the stinger by a gentle scrape of your fingernail or a credit card immediately. Apply a cool compress or ice to minimize the pain and swelling. Localized redness, some swelling and pain at the site are “normal” reactions. Some individuals have swelling beyond the site, but are not considered an adverse reaction. If you are uncertain call a health care professional. Watch for signs of allergic reaction which may include; difficulty breathing, hives, swelling of the face/mouth/throat, wheezing or difficulty swallowing, restlessness and anxiety, rapid pulse, dizziness or sharp drop in blood pressure. Seek immediate medical attention. Self-care kits are carried by those who have allergic reactions to stings.
As a personal note, I've found that baby wipes are great at relieving the sting and cooling the site. We found this out when there was a bee sting in the car. The wipe was soothing and got us to a place with ice. Since then I always carry wipes with me.

Playgrounds

Not all playgrounds are created equal. Check for age appropriate equipment and safe ground cover. Wood chips and absorbent surfacing are best. Sand or loose gravel can seem soft but can become compacted after a rain or over time. Older playgrounds should be checked for loose bolts, bars that turn, curved ladder rungs and swing chains that have spaces between links. Previewing a park before your trip is wise so that you can make an informed playground decision. Being aware of the playground location is also important. Sometimes the playground appears safe but the surrounding environment is not appropriate.

Accident Prevention

• Biking, rollerblading or scooters – wear correct fitting, safety approved helmets and protective gear.
• Water safety – constant supervision is needed by adults who have swimming and CPR skills. Be sure that floatation devices are approved and appropriate for the child.
• Window screens – make sure that screens are secure and in good condition. Remember screens do not stop falls.
• Outdoor play – supervise all play outdoors. Avoid playing in the garage without constant supervision as typical garages are full of potential hazards.

Retirement Savings Plans

This comes from our friends at Breedlove and Associates.

RETIREMENT SAVINGS PLANS

Some household employees ask us about retirement savings plans -- as a way to supplement their Social Security and Medicare benefits. There are a number of tax-advantaged retirement savings plan options available. Unfortunately, most are expensive or difficult to set up and administer, or both.

After extensive research, we're proud to announce that we've found a tax-advantaged retirement savings plan solution that is inexpensive and simple for all parties.

Through Vanguard, who is among the country's highest rated and most respected financial institutions in the U.S., we're able to guide clients and/or their employees to a Roth IRA that has no setup costs, no annual administrative fees, and an "expense ratio" (investment management charge) that is only 0.2% -- a rate that is less than 1/5 the national average. (Note: administrative fees and management costs are a major drain on the long-term investment performance; keeping costs low can mean tens of thousands of dollars to the employee upon retirement).

Under the Vanguard Roth IRA, the employer or the employee is able to contribute up to $5,000 per year ($6,000 if the employee is 50 or older) to the employee's account. Roth IRAs use after-tax dollars -- and then all growth is tax-free and there are no taxes upon withdrawal. The employee has full control over investment decisions. And since it's not tied to an employer, the IRA is completely portable -- allowing the employee to easily take it with her no matter who she works for.

A Vanguard Concierge is available to assist with setup online or over the phone (it takes about 15 minutes) and provide detailed expert guidance to employees on investment options, the tax advantages of Roth IRAs, withdrawal options, etc.

IMPORTANT NOTE: Breedlove & Associates does not charge anything for this solution nor do we receive any kind of compensation from Vanguard. We want all the money to go into the employee's account as working capital -- and we're pleased to offer a solution that does just that. (We feel very strongly that nannies and other household professionals should have access to a simple, cost-effective retirement savings plan if they desire to supplement their Social Security and Medicare benefits).

If you have any questions about tax-advantaged retirement savings plans or the Vanguard solution, please don't hesitate to call. We're here to help.

888-BREEDLOVE (888-273-3356)

www.myBreedlove.com

Nannies from the Heartland wishes all dads

a very happy Father's Day!

Minnesota State Parks - I Can Camp Program

Do you want to take your family camping, but aren't sure that you have the knowledge or equipment you need? Check out the I Can Camp program offered by Minnesota State Parks! These overnight workshops will give you the skills and confidence to enjoy camping as a family. http://www.dnr.state.mn.us/state_parks/can_camp.html


Experienced instructors are onsite the entire time to give hands-on instruction and lead fun activities. Your family will also enjoy plenty of free time for hiking, swimming, fishing, geocaching, biking, or just relaxing in the great outdoors.

Each two-night workshop is only $55 per family and most of the camping gear is provided, including tents, air mattresses, and cooking equipment. There is also a one-night option at $35.

I loved taking my nanny charges camping over the years. This kind of experience is a wonderful skill builder! Their love of outdoors was enhanced by these kinds of experiences.

Father's Day Gift Ideas

Father's Day is this coming Sunday. If you haven't come up with something special to give Dad then check out the following websites for ideas on great projects you can do.

Some ideas I've used include T-shirts with a variety of sayings using the children's hand and/or footprints. "Just for Dad" books that the children have made with their artwork and poems or stories with Dad in mind. We put the books together as you would a scrapbook. Photo scrapbooks that feature Dad and the children are wonderful as well. Most dads love anything homemade including his favorite cookies, cakes or snack items. Package them with special handmade gift wrap and everyone will be all smiles.

My father loved to get handmade gifts and cards. I think most dads do. While gifts that were purchased with him in mind are great, there is something special about that handmade item that can't be beat!

http://familyfun.go.com/fathers-day/fathers-day-crafts/
http://www.mnn.com/family/family-activities/blogs/fathers-day-craft-ideas-for-kids
http://crafts.kaboose.com/holidays/fathers-day/
http://www.apples4theteacher.com/holidays/fathers-day/kids-crafts/
http://www.dltk-holidays.com/dad/
http://www.parents.com/holiday/fathers-day/crafts/
http://www.dl-online.com/event/article/id/68112/group/homepage/
http://www.enchantedlearning.com/crafts/fathersday/
http://www.daniellesplace.com/html/mengifts.html

Summer Fun at the Library

by Kelly Miller

Are you looking for free activities for preschool and school age children this summer?  The library has expanded their offerings.  This summer, the Hennepin County Library is offering environmentally friendly art programs in collaboration with Silverwood Park for children in grades 1-2 and 3-5 in their Paint it Green offerings.  Also, a Guthrie teaching artist is teaching Storymaking for grades 1-2 and Playacting for grades 3-5 in their Acting Workshops for Kids classes.  A Bakken museum educator will be teaching Mini Magnets for grades K-4.  The Minneapolis Institute of Arts is presenting Art Out of the Box:  Black and White and Read All Over for grades 2-5.  MacPhail Center for Music is offering Sing, Play, Learn for preschoolers.  Register online at http://www.hclib.org/.

There is also a full schedule of walk-in events:  magic shows, musical artists, puppet shows, art events and more. 

To encourage reading, there are book clubs:  Girls Only and Guys Read for grades 4-6.  There are junior book clubs for grades 2-3.  For those that can't attend in person, on-line book clubs are offered.  Paws to Read is also on the schedule, in which grades K-6 can cuddle up to a dog and practice reading out loud.

For those that want to read at the library, but also want to be outdoors, the Roseville library has an outdoor reading garden that is complete with benches, mosaic art, pathways, tables and plants.  In an effort to promote community and build relationships, the Roseville library also offers Wii gaming after 1 pm on weekdays and on the weekends. 

The Museum Adventure Pass can also be checked-out at the library.  This pass can get two people into area attractions like the Minnesota Zoo, Como Zoo (3 free rides at Como Town), the Jackson Street Roundhouse, the Works, the Walker Institute of Art, the Foshay Museum and Observation Deck, the Hennepin History Museum, the Museum of Russian Art and more!  www.melsa.org/museumadventurepass
This program will end on Labor Day.

Use the summer to check-out activities and classes at your neighborhood library ... and also, travel across town to visit a library you may not be familiar with.

http://www.hclib.org/
http://www.rclreads.org/
http://www.anoka.lib.mn.us/