I pay roughly $8K per year in child care expenses. My family consists of just my five year old son and myself. I own a house and pay $610 a month for my mortgage---about 450 goes towards interest; the other towards principal. Can I subtract those things from my income?The reason why I'm asking is because I was thinking about picking up a part-time job during evenings in the fall. I would make about $600 extra per month. Now, I'm thinking that it might be better if I don't work so that I can stay in the 15% tax bracket. I have some stock, but I won't sell this year if I can stay in the 15% tax bracket. I would have no other gains/profits this year, other than my income.Ideas??? Suggestions??
Although your regular gross salary puts you slightly in the 25% tax bracket, your expenses drop you down below into the 15% bracket. Remember that the tax brackets change only at the margin, in other words, you pay the 15% up to the change in brackets and then 25% on the amount over the margin (change line). Also, even assuming you were in the 25% before the part time job, would the extra $60 a month you would be paying in taxes be enough of a deterrent to not work (you would pay $90 in the 15% bracket and $150 in the 25%). Also, don't forget to count in the property tax deduction on your house,
