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Old 04-22-2013, 04:01 PM
Beachnana Beachnana is offline
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I have been reading lots of threads and opinions on section 7 expenses and childcare. My understanding is you take both parents NoA and base your calculation on the %ratio calculated by adding the 2 incomes and dividing each income by the grand total. That give you the ratio proportionate to income. Then assuming a 25% tax benefit ( which is bout average) you deduct 25% from the gross cost and you come up with the Net cost of the expense which is then proportioned according to the income ratios already calculated

Example: income d. 80,000
Income.m.35,000
Grand total incomes. 115,000

Ratio income d. 80,000/115,000. = 69.57%
Income m. 35,000/115000. = 30.43%

Day care costs. 4000. Less 25%tax benefit calculation ($1000) = $3000
Income d. Pays. 3000x 69.57%. $2087.1/year $172.59/ month
Income m pays. 3000x 30.43%. $912.90/ year. $76.pi month
Each year this ratio would be subject to change if income levels of either person change.

If you work out the ratio you can then apply it to monthly daycare costs if they fluctuant.
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