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By Vanessa
Rasmussen, © 2004, All rights reserved.
Website: http://www.startingadaycarecenter.com
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Childcare
costs vary quite a bit throughout United
States. The Children's Defense Fund states
that full time child care in Texas would
cost around $4200 a year, whereas if you
were in Boston you would be paying as much
as $9000 a year. Child care is probably
your biggest expense if your child is not
in school yet. Private nannies may cost
anywhere from $2000 to $5000 a month. Day
care centers aren't cheap either. A preschooler
would be charged at least $5 an hour. |
There is no denying
that childcare costs are huge. However, if you
do your homework well, you may be able to achieve
substantial savings.
Here are some
tips to help reduce childcare costs:
- Always shop
around before deciding on a daycare center
or private nanny. Ask parents in your neighborhood
as well as workplace.
- Approach childcare
associations. These may help you save a lot
of money.
- Avail all
tax benefits, especially the Child Tax Credit.
This entitles you to a $500 tax credit for
every child below 17 years of age. It's available
for taxpayers with an adjusted gross income
of $75,000 or less who file a single return.
The credit is reduced by $50 for each $1,000
or fraction above those amounts. Ensure that
you keep track of all your childcare costs
and save receipts. Besides this, there are
other deductions that may be useful. For more
information visit the IRS website at http://www.irs.gov
- You may also
want to check out the Flexible Spending plan.
This plan allows you to deduct the costs of
childcare (as much as $5,000 a year per household)
from your pretax income, thereby lowering
your taxable earnings. Depending on your income
level this plan, usually offered by your company,
may yield more benefits than the Tax credit.
However, you can chose only one option, so
chose wisely.
- If you put
your child in a daycare center ensure that
you get there on time. Daycare centers charge
exorbitant amounts of money if a parent is
late. Coordinate your schedule with your partner
so your child can be dropped off later or
picked up earlier. Anticipate traffic and
be on time (or early) for pickup.
- Split the
cost of a nanny or au pair with friends or
neighbors who have children. This may save
you considerable amount of money. You would
be better off swapping with friends, neighbors,
or co-workers with children for short time
periods.
Copyright
2001, 2004. All rights reserved. Any reproduction
of this article in whole or in part without
written or verbal permission is strictly prohibited.
For information about reprinting this article,
contact the copyright owner: Vanessa Rasmussen,
Ph.D, Starting a Day Care Center, http://www.startingadaycarecenter.com.
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