| The Leave It To Beaver Family is now just a memory. | | | | children are older, this may not be a consideration. |
| Many of us grew up in an era where it was the | | | | Many parents don't feel comfortable with the latch-key |
| exception to the rule if both a mother and father in a | | | | kid concept and will opt for some form of after-care |
| family were working outside the home. When a new | | | | for their school age children. |
| baby arrives, the question of whether or not it makes | | | | Individuals that pay for day care expenses for their |
| sense for one spouse to stay home becomes | | | | children may be eligible for a federal tax credit of up to |
| paramount. This is not an easy decision, and every | | | | 35% percent of the cost of day care. To qualify for |
| family has its own unique set of circumstances to | | | | the child care credit, you must have a dependent child |
| work through on this question. This article will address | | | | age 12 or younger. You calculate your tax credit on |
| the issue of whether it makes financial sense for both | | | | Form 2441 (PDF) and Instructions for Form 2441. |
| parents to be working outside the home. | | | | So, there is a little help here from Uncle Sam, but it is |
| 1. The added cost of a two-income lifestyle | | | | not likely a real game-changer. |
| Before getting to the point of doing an analysis of the | | | | 3. Financial calculators that may help you make a good |
| related tax issues and other expenses directly related | | | | decision |
| to earning more money, let start by considering the | | | | Don't forget that a second income also means |
| additional cost of the two income lifestyle. | | | | additional income taxes. This can get somewhat |
| Transportation costs - The cost of operating a | | | | complicated especially when considering the possibility |
| second vehicle for commuting purposes. Most likely it | | | | of more income moving you into a higher marginal tax |
| will cost about.50 per mile for your commute to work. | | | | bracket, state tax considerations, etc... The good news |
| This figure includes fuel, maintenance, and depreciation. | | | | is that there are financial calculators to crunch these |
| This does not account for other miscellaneous | | | | numbers for you. |
| expenses such as parking fees and tolls, and no, the | | | | Stay At Home Calculator from - Very comprehensive |
| cost of commuting is not deductible on your taxes. | | | | but does not appear to factor in the federal childcare |
| Clothing - Depending on the type of work, there | | | | tax credit. |
| may be substantial ongoing expenses for uniforms or | | | | Adding A Second Income Calculator From MSN - |
| professional clothing. | | | | Appears to take tax rates into account but it is unclear |
| Tools of your trade - This may include an additional | | | | whether or not the federal childcare tax credit is |
| laptop computer or other required tools or technology | | | | comprehensively included. |
| needed to perform your employment duties. | | | | Ultimately, it may be well worth it to pay a consultation |
| Eating away from home - It is likely that there will | | | | fee to discuss your entire financial picture with an |
| be a substantial increase in eating at restaurants both | | | | accountant or financial planner. |
| during the work day as well as after work; after all, | | | | 4. Working from home; the answer? |
| there is no one home putting in the pot roast at 1 for | | | | Starting your own home-based business or |
| dinner at 5. | | | | telecommuting may be the best answer. Many |
| 2. The tax advantages of a two-income lifestyle | | | | companies actually encourage telecommuting and |
| Without a doubt, the largest single expense that | | | | freelancing arrangements for employees that need to |
| comes into play would be the cost of childcare. If your | | | | work from home. |