Multiple kids in daycare. Financial options outside of DC FSA?
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Multiple kids in daycare. Financial options outside of DC FSA?
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?
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.
- LAlearning
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Re: Multiple kids in daycare. Financial options outside of DC HSA?
ha...the extra tax deduction....
I know nothing!
Re: Multiple kids in daycare. Financial options outside of DC HSA?
One of you could stay home.
Re: Multiple kids in daycare. Financial options outside of DC HSA?
Other than additional income tax deductions...none that I've found.
Re: Multiple kids in daycare. Financial options outside of DC HSA?
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!
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Re: Multiple kids in daycare. Financial options outside of DC HSA?
I think you mean dependent care FSA, there is no dependent care HSA
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Re: Multiple kids in daycare. Financial options outside of DC HSA?
Depending on where you live... at some point Nanny's become cheaper (and more convenient). Here it is about break even at 2 kids.
Re: Multiple kids in daycare. Financial options outside of DC HSA?
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.
Re: Multiple kids in daycare. Financial options outside of DC HSA?
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.
We used 2% cash back credit cards to pay for childcare. Better than nothing.
Re: Multiple kids in daycare. Financial options outside of DC HSA?
Be grateful that you can get 2x childcare for $26k a year, that will only cover one child in a lot of locations.
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Re: Multiple kids in daycare. Financial options outside of DC FSA?
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).