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O/T Doing some Rough Math

stepmom31's picture

Submitted by stepmom31 on Wed, 02/23/2011 - 9:51am

Guess what the Earned Income Credit is if you choose to work for just $16500 a year and have 2 qualifying children? $5000!

So if BM essentially works for $16500, pays no taxes, maybe $1000 SocSec & Medicare, gets $5000 EIC & $2000 Child Tax Credit PLUS more back on her tax refund, collects CS of about $12500, low income housing, free lunches for kids, Medicare for herself. Total = $35,000 annually for 3 people minus 2 on the weekends

DH works for $60000, pays $10000 health insurance, pays $3000 taxes, pays $4000 SocSec & Medicare, pays $12500 CS, gets $1000 Child Tax Credit. Left with $31500 for 3 people plus 2 kids every weekend.

WOW.

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stepmom31's picture

Submitted by stepmom31 on Wed, 02/23/2011 - 11:57am

More math.

If I started working (because that is indeed the plan) and I make $25000, combined take-home would be $49500, married filing jointly.

If we divorced, and I give DH the child exemptions to reduce his taxes, but take all the credits, I'd get extra $$ for having a low income, and then if DH & I combine our take home, it would be $54500.

Whopping difference of $5000.

Maybe we should get divorced, huh? I wonder if people do it... be divorced on paper for tax purposes and still live together?

Married filing jointly or separately is a lower standard deduction (5700+5700) than Single & Head of Household (5700+8400).

And Married Filing Separately cannot claim EIC.