So I’ve got good news and bad news. Since you can’t tell me which news you want first (because I wrote this at some point in your past…just think about it), I’m going to decide for you…and my decision is…the good news!
Since my last blog post, I’ve become a Daddy for the 2nd time! Harry was born in October and he apparently looks exactly like me, so I make sure to apologize to him daily. Please send your congratulations in the form of babysitting vouchers that my wife and I can use at a day and time of our choosing.
Now the bad news. And yes, it does relate to Harry (and his oh-so-adorable big sister) which makes this segue that much more impressive. First of all though, the good news about the bad news is that it only affects you if you have kids in $7/day daycare…daycare that now costs $7.30/day. But that’s not actually the worst of the bad news, so here it is in all its horrible glory.
Depending on your family income, that same “$7.30/day” daycare could end up costing you a lot more. A WHOLE lot more. Worst of all, you won’t see it coming because you still only need to pay $7.30/day to the daycare itself. The rest will be charged to you on your tax return for 2015 (due in April 2016). There is no effect on this April’s taxes. Please note that if you make under $50,000 as a family, you will not pay more than $7.30/day. For everyone else, it goes a little something like this:
- If your family income is…between $50,000 and $76,000, you’re going to end up paying $8/day.
- If your family income is…between $76,000 and about $156,000, you’re going to end up paying around $1.50 more per day for every $10,000 you make over $76,000.
(For example, if your family income is $106,000, you’ll pay $8/day plus ($1.50 x 3) or $8+$4.50 = $12.50/day. If that confused you more than I wanted it to, please call me and I’ll explain everything you need to know)
- If your family income is…over $156,000, you’re going to end up paying $20/day
The scariest part of all is what I mentioned above – that you won’t have to pay a penny over $7.30/day until tax time comes in April 2016! At which time, you’ll be getting a very nice Easter/Passover/Spring surprise in the form of a very large tax bill that you weren’t expecting. For most people, it’ll be only be around $180 per child in $7.30/day daycare. But if you have 2 kids in $7.30/day daycare and you make over $156,000 as a family, that “surprise” is going to be a bill for around $6,660.
Have a nice day.
The Funny Accountant
Don’t forget to follow me on Twitter if you like what you read! And as always, if you have tax questions, need advice on your personal taxes, corporate taxes or anything else accounting or business related, please contact The Funny Accountant/President of MK & Associates by phone at (514) 833-1158 or by e-mail at email@example.com.
Also, for a witty and insightful read, check out the wifey’s blog. It’s funny and good.