Multiple kids in daycare. Financial options outside of DC FSA?

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FiscallyResponsible
Posts: 106
Joined: Mon Feb 22, 2016 8:02 pm

Multiple kids in daycare. Financial options outside of DC FSA?

Post by FiscallyResponsible »

Hello Bogleheads,

I recently found out my wife and I have a second kid on the way. For two full-time working parents, that means daycare costs jump to about $26,000/year. We already put $5,000/yr into a dependent care FSA through my wife's work. Are there any additional tax options / financial strategies to lessen the blow of the other $21,000/yr?
Last edited by FiscallyResponsible on Wed Oct 19, 2016 9:47 am, edited 1 time in total.
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LAlearning
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Location: Los Angeles

Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by LAlearning »

ha...the extra tax deduction....
I know nothing!
TOJ
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Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by TOJ »

One of you could stay home.
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Kosmo
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Location: Philadelphia

Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by Kosmo »

Other than additional income tax deductions...none that I've found.
e5116
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Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by e5116 »

That actually sounds like pretty reasonably priced daycare (just over $1000/month). Much cheaper than what I've got for my 6-month old. Not that that gives you any solace. They say the baby/infant stage for your child is the most expensive it'll get.... Until they go to college possibly. So, things get cheaper later!
Spirit Rider
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Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by Spirit Rider »

I think you mean dependent care FSA, there is no dependent care HSA
myford.m.lseven
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Joined: Sun Jan 03, 2016 1:29 pm

Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by myford.m.lseven »

Depending on where you live... at some point Nanny's become cheaper (and more convenient). Here it is about break even at 2 kids.
wxl31
Posts: 72
Joined: Sat Jun 15, 2013 6:52 am

Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by wxl31 »

If the daycare facility is able to take credit card payments, there are several ways to get generic Visa or Mastercard gift cards at drug stores or office supply stores for ~4-5% off. At a minimum, pay with a 2% credit card if you don't want the hassle of dealing with gift cards.
nolesrule
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Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by nolesrule »

The childcare credit caps the deduction for 2 children at $6000, but is reduced by the FSA, so it is effectively on only $1000 of expenses if you max out the FSA. If your income is above the highest threshhold, that's a grand total of $200 in tax savings above and beyond the FSA.

We used 2% cash back credit cards to pay for childcare. Better than nothing.
PowDay
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Joined: Wed Aug 31, 2011 7:43 am

Re: Multiple kids in daycare. Financial options outside of DC HSA?

Post by PowDay »

Be grateful that you can get 2x childcare for $26k a year, that will only cover one child in a lot of locations.
Topic Author
FiscallyResponsible
Posts: 106
Joined: Mon Feb 22, 2016 8:02 pm

Re: Multiple kids in daycare. Financial options outside of DC FSA?

Post by FiscallyResponsible »

Thank you for the responses. I didn't think there was anything additional but figured I would poll the minds of this forum. I am paying using a 2% back CC. I don't know that a nanny would make sense financially unless we were putting 3 or 4 kids through daycare. 26k for a person to work full time seems kind of low. My wife and I also make enough that it doesn't really make sense for either one of us to stay home (at least financially).
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