How To Reduce Childcare Costs
Next to rent or mortgage payments, childcare often ranks as the second-highest expenditure in a household budget. Working couples can pay a whopping 10-20% of their incomes on childcare while their children are small. Seeing the high cost needed to be expensed for their children's care, some couples decided to take a better financial sense for one parent to take a few years off to stay home with the baby.
But a little inventive planning can save you money without compromising the quality of care and the government does offer several tax breaks to families with children. This article will outline helpful hints for parent's references:
Pay with pre-tax dollars: You can significantly cut the cost of childcare by paying with pre-tax dollars. Many employers offer flexible spending accounts. Check with your employer to see if this is available. Flexible spending account allows you to set aside pretax dollars to pay for licensed dependent care services.
Take the childcare credit on your tax return: The government offers a tax credit that you can subtract from your tax bill at the end of the year. Unfortunately, you aren't allowed to use both the childcare tax break and the child tax credit. Enroll into childcare subsidies program See if you qualify for childcare subsidies and programs at local, state, and federal government levels. Depending on your income, you may be eligible.