To determine the potential tax benefit for child care expenses, we need to consider the Child and Dependent Care Credit.
The Child and Dependent Care Credit is a tax credit provided by the IRS to help taxpayers with eligible child care expenses. The credit is calculated based on a percentage of the qualifying expenses, and the percentage ranges from 20% to 35% depending on the taxpayer's adjusted gross income (AGI).
In this case, Shyla paid $14,000 in child care expenses in 2021, and her AGI is $120,000. To calculate the potential tax benefit, we need to determine the applicable percentage based on her AGI.
Since the specific percentages depend on the tax year and can change, I'm unable to provide the exact percentage for 2021 without the updated tax information. However, you can refer to the IRS guidelines or consult a tax professional to determine the correct percentage for Shyla's AGI in 2021.
Once you know the applicable percentage, you can multiply it by the child care expenses ($14,000) to find the potential tax benefit.