I am returning to work soon and will pay approx $13,000/year for care for my little one. I would appreciate feedback as to whether I am understanding the value of claiming child care on taxes...
I earn approx $35,000/ year and as I understand it, I can claim $8,000 on taxes for his day care, so when claimed my taxable income would be $27,000.
On 35,000 (not claiming child care expenses): 15% for federal tax = 5,250 7.7% for NL tax = 2,695 = $7,945 in taxes
On 28,000 income (claiming child care expenses): 15% for federal tax = 4,050 7.7% for NL tax = 2,156 = $6,206 in taxes
So, basically I would save approx $1,739 in taxes if I claim child care expenses?
Thanks for your input!