CHARLOTTE, N.C. — Families are asking where’s the money as they wait to see if federal lawmakers will pass the Tax Relief for American Families and Workers Act.
The new rules would increase the maximum refundable amount per child from $1,600 to $1,800 for the 2023 tax year.
WCNC Charlotte spoke to a CPA about other ways to curb childcare costs and help families get ahead.
Like many millennial couples, when Emily Luk and her husband got married, they knew they wanted to accomplish some financial goals as a couple. But they found available financial products weren't really addressing their needs.
"There was just nothing that really made it easy for us to understand, 'where are we together?' you know, 'what's my what, what is ours? where's our money going?' and how do we start saving and investing towards the goals that we have," Luk said.
To let us know how WCNC Charlotte can help you get ahead in 2024, email us at newstips@wcnc.com.
So they founded Plenty, a wealth-building platform, aimed at helping modern couples plan for their future.
Luk said one area couples usually think about is child care. She said it can eat up as much as 20% of a family's income.
"What we saw was, especially for North Carolina, it was very common for expenses for the first year of a kid being about under one year old to cost anywhere from $15,000 to $25,000," she said.
Luk said there are some things you can do now to manage some of those family-related expenses, including taking advantage of tax credits. Couples filing jointly might increase eligibility; just make sure to keep good records.
"So come tax filing season, you know how much that you've spent the last year, and you can file that as part of your refund, while you're filing taxes in April," Luk explained.
Luk also suggested checking to see if your employer benefits include a Dependent Care Flexible Spending Account, a pre-tax solution to pay for daycare.
"The most common regret people have, especially after they've had kids is they had no idea how much childcare or daycare would cost," she said.
And try to find creative ways to stretch your hard-earned money.
"Having hybrid structures where there's nanny share programs, or maybe they work four days and look after someone else's kid on the one day that they're also looking after their kids," she said.
Luk said the key to managing childcare expenses is understanding how much it will cost where you live and then start saving for it as early as you can. That means sometimes merging finances between you and your significant other so you're not as stressed once you’re in the thick of raising a child.
Contact Jane Monreal at jmonreal@wcnc.com and follow her on Facebook, X and Instagram.
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