July 2024 Client Profile

Small business owners Jack and Ally are considering one of them being an at-home parent to their expected baby.

Talking to their tax advisor about the financial aspects, they’ve learned that annual childcare costs average more than $7,500* per child, up to $3,000 of which may be offset using the dependent tax credit. They also may gain a child tax credit (up to $2,000), regardless of whether they both continue working.

The advisor also emphasized the importance of insurance. The business’s health care insurance would continue, however, their only life insurance is what the company offers, so they should evaluate how much coverage they will now need, keeping in mind that if they sell the company, they will lose that coverage. Personally owned life insurance remains in effect, as long as the premiums are paid.

With professional guidance, they learned that Ally can work fewer hours from home, which would provide a paycheck and keep her current in her field. Her family, who lives nearby, is willing to provide in-home childcare when needed.

*The Harris Poll, Dec. 2023
Client Profile is based on a hypothetical situation. The solutions discussed may or may not be appropriate for you.