Reply to When making more actually is a real tax disadvantage?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I thought you were going to say last year you got 9k back (!!!!!) and this year you owed 6pm so you lost 1k. You didn’t. You made thousands more this year pre tax, and still have thousands more post tax. How are you worse off? Explain like I’m 7.[/quote]

Then issue is that I literally worked TWICE as many hours this year as last year. Plus we spent 4k on summer childcare so that I would have the continuity required to do client work over the summer, which I did not do the previous year (I did some work over the summer, but had to turn down some projects because I was full time parenting much of the summer).

So between the 9k in additional taxes and the 4k in summer childcare, that's 13k. I made 16k more than I did the previous year. So total an extra 3k. To literally work twice as much.

Yes, I understand our increased tax burden is also partly due to my DH's raise. But my DH got a raise for doing the same job. He didn't get a promotion -- our family gets that money without him having to do a single second of extra work. Whereas my increase in income equals hours and hours of extra work, plus added expense (some of which is deductible but the childcare isn't).

So that's the issue. Yes we have more money this year than last. But we'd have a bit more money regardless of how much I worked because of DH's raise. I'm not suggesting I don't want him to get a raise. I'm questioning whether doubling my work efforts makes sense when so much of it gets instantly swallowed up by taxes and [b]childcare costs.[/b][/quote]

It's not taxes that are the issue.  It's the extra time and how it costs you a lot in childcare costs.  That's an issue every dual-income family with very young children has to deal with. Everyone deals with it in different ways depending on their particulars.  Eventually your kids will be in school and this financial pressure won't be as much.  It's just the way it is in the US.[/quote]

My kid IS in school. The childcare costs are just for the summer. In 2022, we spent almost nothing on summer childcare costs because I was able to turn down a couple projects and shift some work to nights and weekends in order to be our summer childcare solution. In 2023, I was really working to build my business and we paid for actual childcare, plus we had some aftercare costs during the year. So we spent a lot more on childcare in order to enable me to double my efforts in my business.

These costs will not go away or get lower -- we will need to figure out summer childcare and aftercare for the foreseeable future. I am struggling with it because I feel like I need to be earning a LOT more to justify those expenses. My hope with the business was that I'd be able to earn enough more to actually not only cover childcare costs but also additional costs of activities as our DC gets older plus also put more away for college and retirement. I am wondering if I am deluding myself.

The goal here was flexibility, too, as opposed to a normal 9-5 job which is what I used to do, which had very limited flexibility and was hard on our family dynamic. But the more I work, the less flexible it is. I get that all families deal with balancing these issues, I'm just frustrated because I feel like a gerbil on a treadmill right now -- I'm working really hard and I feel like I'm in the same spot I was in last year, basically.[/quote]

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