If you're a parent, you're probably wondering: How much does it cost to raise a child per year?
2022 yearly amount cost per child
$13,000 per year per child
strap in boys and girls because inflation might send us for a ride. But if you’re a planner like me then you want to know so you can fit it all in and not stress about it.
The USDA compiles an annual report on child expenses to help families prepare their budgets. State governments and courts also use the information in drafting child support and foster care guidelines. The main expenses include housing, food, transportation, health care, education, clothing, and miscellaneous costs.
Are child care costs tax deductible?
Yes. Talk to your accountant. You may qualify for a tax credit on your taxes of: up to 35% of qualifying expenses of $3,000 ($1,050) for each child or dependent.
Child Care Cost for Each State
How much does each child cost in 2022?
The cost of raising a child is $13k a year for the average family. While this amount seems high, it actually varies greatly. While families in the urban areas spent the most money, rural households spent less money on raising a child. In rural areas, families spent about two-thirds of the cost of raising a child. This difference is largely due to lower housing costs and lower expenses associated with child care.
The cost of raising a child per year varies greatly depending on the region you live in, the number of children in the family, and the income of the parents. If the parents have more money, they may choose to have two children instead of one. Children can be expensive if parents have different incomes, so it is important to plan ahead. Families with lower incomes may choose to have fewer children.
Why is child care cost skyrocketing?
The cost of raising a child has been increasing in recent years, inflation being a huge variable that seems to be affecting parents especially in 2022. Take a look at google trends data showing how many parents are searching the term suggesting to me that parents are wondering why child care is going up so much this year.
How to get tax breaks for hiring your child.
You can hire your child under the age of 18. Why? Lowering taxes. Let's break this down. You can pay your child $12,950 in 2022 and simply put, they won't pay taxes. You can even take it a step farther and potentially deduct the child's wage as a business expense. Be sure to talk with your accountant on how to work out these details. Remember that the rich do everything possible to minimize the amount they pay in taxes and so can you.
How to afford child care
While it's not easy to afford child care, many families are struggling to make ends meet.
- Ask your employer about their benefits package for parents, such as adoption assistance, pre-tax transportation plans, and educational assistance.
- Join or create a babysitting co-op.
- Split a babysitter or nanny with another family.