Just did my taxes....

Just saw our tax accountant on Saturday. Don't have the numbers but we are generally expecting a fed tax return between $1-2k and a state around $1k.

What drove me nuts to hear is the childcare credit was reduced to $1200 (from $3000). We paid $14,500 in daycare last year for our son who turned 3 in April and was mostly potty trained the first few months of the year and fully potty trained a month or 2 after his bday.

Now I get that taxpayers shouldn't pay for my child's care but good God, my wife and I are people that should have more kids (conservative, white, Christian, college educated, etc) and yet we are cost burdened already with 1 child in daycare.

black4vcobra said:

Just saw our tax accountant on Saturday. Don't have the numbers but we are generally expecting a fed tax return between $1-2k and a state around $1k.

What drove me nuts to hear is the childcare credit was reduced to $1200 (from $3000). We paid $14,500 in daycare last year for our son who turned 3 in April and was mostly potty trained the first few months of the year and fully potty trained a month or 2 after his bday.

Now I get that taxpayers shouldn't pay for my child's care but good God, my wife and I are people that should have more kids (conservative, white, Christian, college educated, etc) and yet we are cost burdened already with 1 child in daycare.

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Don't have kids then?

13COBRA said:

Don't have kids then?

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That's the obvious answer but it's clearly more complicated than that on a personal and also societal level. If you haven't been following the news, us damn millennials aren't making enough kids...

black4vcobra said:

That's the obvious answer but it's clearly more complicated than that on a personal and also societal level. If you haven't been following the news, us damn millennials aren't making enough kids...

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I have 4 myself. Daycare is expensive...but why should a tax relief thing be in place to help pay for more of it?

black4vcobra said:

That's the obvious answer but it's clearly more complicated than that on a personal and also societal level. If you haven't been following the news, us damn millennials aren't making enough kids...

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Fine, majority of us shouldn't be raising children

13COBRA said:

I have 4 myself. Daycare is expensive...but why should a tax relief thing be in place to help pay for more of it?

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You must have nightmares about paying for daycare!

I'm not advocating for my childcare to be paid by anyone else. I'd just like to be able to pay for my son's daycare with pretax income.

FSA deduction is $5k and hasn't been updated in 30+ years. It doesn't quite measure up anymore.

On a semi related note, we moved last year and our tax accountant was shocked how much we pay in property tax and just over half goes to the school district. Fun paying for the daycare of my own and also the education of other people's children but I get that's what's required for a civilized society.

September will mean 4k though so daycare costs will be just about cut in half.

BOOGIE MAN said:

Fine, majority of us shouldn't be raising children

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Agreed! We have our shit together more than most yet I feel like parenthood is an extreme amount of responsibility to put on us!

black4vcobra said:

Just saw our tax accountant on Saturday. Don't have the numbers but we are generally expecting a fed tax return between $1-2k and a state around $1k.

What drove me nuts to hear is the childcare credit was reduced to $1200 (from $3000). We paid $14,500 in daycare last year for our son who turned 3 in April and was mostly potty trained the first few months of the year and fully potty trained a month or 2 after his bday.

Now I get that taxpayers shouldn't pay for my child's care but good God, my wife and I are people that should have more kids (conservative, white, Christian, college educated, etc) and yet we are cost burdened already with 1 child in daycare.

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The only thing about this I'm confused on is the inclusion of the potty training progress...Are your daycare rates dependent on whether your child is potty trained?

KilledbyKenne said:

The only thing about this I'm confused on is the inclusion of the potty training progress...Are your daycare rates dependent on whether your child is potty trained?

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It's generally based on age but that's closely correlated with potty training. Obviously a child who can go to the bathroom on their own requires less attention that a child that needs 4+ diaper changes over a 9-10 hour day.

There are also state laws regarding how many children can be watched based on their ages. For children under 2, one adult can watch 4 children. At 3, an adult can watch 10.

I've always wondered where my tax break is for "choosing" not to have children.

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black4vcobra said:

Just saw our tax accountant on Saturday. Don't have the numbers but we are generally expecting a fed tax return between $1-2k and a state around $1k.

What drove me nuts to hear is the childcare credit was reduced to $1200 (from $3000). We paid $14,500 in daycare last year for our son who turned 3 in April and was mostly potty trained the first few months of the year and fully potty trained a month or 2 after his bday.

Now I get that taxpayers shouldn't pay for my child's care but good God, my wife and I are people that should have more kids (conservative, white, Christian, college educated, etc) and yet we are cost burdened already with 1 child in daycare.

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Covid hand outs by the dems is what changed the child care tax credit to be 3,000 for 2021, it also increased the childcare FSA to like 10,800 or something like that for one year. Its was raised along with the child tax credit being raised form 2,000 to 3,000/3,600 for 2021 and now it is back down to 2,000 per for 2022.

They had the ability to cram it in one of the covid packages but not the ability to fund it going forward so they could campaign on the repubs are bad and wont pay for child care.

black4vcobra said:

It's generally based on age but that's closely correlated with potty training. Obviously a child who can go to the bathroom on their own requires less attention that a child that needs 4+ diaper changes over a 9-10 hour day.

There are also state laws regarding how many children can be watched based on their ages. For children under 2, one adult can watch 4 children. At 3, an adult can watch 10.

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Oh yeah. I'm aware of the laws regarding care giver/child ratios. I just thought it was odd mentioning the potty training instead of just the age. I wasn't sure if I should feel fortunate that our provider doesn't charge more based on diaper changes, or irritated that I didn't receive a discounted rate once they were potty trained. Lol

VegasMichael said:

For the same reason that someone can sell an investment property and take the proceeds and do a like-kind exchange(1031) for another property of identical or higher value and not owe any tax.

I don't have a problem with a one-time dividend tax but when I reinvest in additional shares I don't like having to pay tax again on those reinvested shares when I go to sell.

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Except you DIDN'T do a 1031 exchange or anything similar to it.

You took income, the dividend, and bought more stock.

You didn't exchange stock for stock, there was no "like kind" exchange. You converted income to stock is all. You could have taken that income and bought anything with it, you only chose to have them INVEST it in more stock.

You are confusing INCOME and CAPITAL GAIN in your discussion. A 1031 like-kind exchange delays the recognition of capital gains, not income. Dividends are income, not capital gains; they are the payment of corporate profit to the owners. No different from being sole proprietor of a business and having to pay taxes on the profit (income) that comes in.

JimCSHO said:

Except you DIDN'T do a 1031 exchange or anything similar to it.

You took income, the dividend, and bought more stock.

You didn't exchange stock for stock, there was no "like kind" exchange. You converted income to stock is all. You could have taken that income and bought anything with it, you only chose to have them INVEST it in more stock.

You are confusing INCOME and CAPITAL GAIN in your discussion. A 1031 like-kind exchange delays the recognition of capital gains, not income. Dividends are income, not capital gains; they are the payment of corporate profit to the owners. No different from being sole proprietor of a business and having to pay taxes on the profit (income) that comes in.

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I'm definitely not confusing income and capital gains whatsoever. I'm getting dividends from Stock A and reinvesting them right back into Stock A. That's like-kind to me. Don't forget, Stock A could pay me a stock dividend of additional shares instead of cash and I would not owe any dividend tax. That's the crux for me. I'm merely using an example of why I think dividend income should be afforded the same luxury as a 1031 exchange. I'm not alone here either since six or seven states don't tax dividends at all. What's more, short term capital gains are added to your adjust gross income and counted as ordinary income and taxed as such. Long term gains are added to AGI as well but are taxed at the capital gains tax rates.

VegasMichael said:

I'm definitely not confusing income and capital gains whatsoever. I'm getting dividends from Stock A and reinvesting them right back into Stock A. That's like-kind to me. Don't forget, Stock A could pay me a stock dividend of additional shares instead of cash and I would not owe any dividend tax. That's the crux for me. I'm merely using an example of why I think dividend income should be afforded the same luxury as a 1031 exchange. I'm not alone here either since six or seven states don't tax dividends at all. What's more, short term capital gains are added to your adjust gross income and counted as ordinary income and taxed as such. Long term gains are added to AGI as well but are taxed at the capital gains tax rates.

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Keep in mind, the 1031 exchange delays tax on the gain, it doesn’t dissolve it. In fact, you’ll likely end up paying a higher tax rate as your total gain amount keeps getting larger the more you do it.

And why did you pay capital gains on your home sale? Wasn’t it your primary residence? If you live in it for 3 or the last five years, it’s your primary residence.


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MG0h3 said:

Keep in mind, the 1031 exchange delays tax on the gain, it doesn’t dissolve it. In fact, you’ll likely end up paying a higher tax rate as your total gain amount keeps getting larger the more you do it.

And why did you pay capital gains on your home sale? Wasn’t it your primary residence? If you live in it for 3 or the last five years, it’s your primary residence.


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You can do 1031 exchanges until death. Who cares about taxes after that?
I had to pay capital gains on the profits I had above the 250k exclusion.

I don't know if I'm more shocked by how much you owe or by all the financial terms that everyone but me understands.

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Always could be worse. How would you like to Pay Treynor’s taxes.

I'd bet for most of us, if we had Treynor's accountants, we would be paying less taxes.

598 said:

I'd bet for most of us, if we had Treynor's accountants, we would be paying less taxes.

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Maybe.

Any more, unless you own some type of business...it's really hard to minimize your tax burden.

598 said:

I'd bet for most of us, if we had Treynor's accountants, we would be paying less taxes.

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Ya. Not a chance.


And owning a business may reduce your personal income tax, but you’re gonna pay tax on the revenue.

You can cheat to make it look like your expenses are equivalent to your business income, which will reduce your tax. But if you can get it really low, you aren’t making any money anyways.


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