The kids are like used cars: their value depreciates (tax-wise) while the cost to maintain them goes up.
Mrs. Nod is working on the taxes; it seems that even though our withholdings remained constant from last year, the numbers have worked out less in our favor. Instead of getting a return on our taxes, we might owe slightly on the Federal side. (But since I under-withhold on the State side, it may still be net positive.)
One of the factors seems to be that the Bush tax cuts are dwindling. The initial plan doubled the traditional child credit from $500 to $1000 per child; now they are about $700, and should be back to $500 by 2011 (if I understand correctly).
Since the kids are our investment and their value is dropping precipitously, do they now qualify as a "troubled asset" a-la TARP?
Hey, can I get a bail-out over here?
2 comments:
I think your references are out of date. The Child Tax Credit was scheduled to begin dropping in 2005, but has not done so. Congress passed the Working Families Tax Relief Act of 2004 to keep the tax credit at $1000 until 2010, as long as you're still within certain income thresholds.
If you are not, then I can officially say "nyah nyah nyah! I make little enough money that I still get a thousand bucks back from the government for each of my kids!" Wait. . . ;)
Well, like I say, Mrs. Nod does the taxes, not me.
It still stinks; when I was in college I had a grant for half the tuition and a work-study job. But if I made over a certain amount in my job, they took the overage out of my grant. No matter what I did, I couldn't get ahead. So I quit the work study job and went out on the economy, because somebody still had to pay for the other half of the tuition.
Same thing here; someone has got to pay for those "extra" kids! ;-)
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