DH's new job -$42,000
My job-25,000
Daycare FSA -5000
Health insurance- $1560
Married, one kid who is in daycare
Income: 42k + 25k - 5k -1.56k = $60.44k
Exemptions: 3,950 * 3 = 11.85k
Standard deduction: 12.4k
Taxable income: 36.19k
Federal taxes: $1815 + (36.19-18.150)*.15 = 1815 + 2706 = 4521
Subtract the child tax credit leaves you with $3,521 in federal taxes.
Thank you! That jives with mine. And if I put 18040 into 403b's I can avoid the 15% bracket right?
Yes, though keep in mind only the income which is above $18,150 of your taxable income is "in" the 15% bracket.
I'm not 100% on this but I think you likely would become eligible for the
Earned Income Tax Credit at that level too, since your AGI would become 60.44 - 18.04 = 42.4k, which is lower than the threshold for a family with one child (53k).
But I'm not sure how all this stuff works, seems to me you would get benefit from it.
You might also get some of the
savers credit if you are at that income level too?