Okay, so the missus and I were out having dinner with some of our friends the other night. After exchanging war stories about trying to make ends meet, the following exchange occurred:
Mr. P: “My wife and I both work, but it’s always tough to make ends meet.”
Mr. Q: “How much does your wife make?”
Mr. P: “Oh, slightly above minimum wage, just $8/hour.”
Mr. Q: “Pfffft! It’s not worth it; you’d be better off if she stayed home and you claimed her as a dependent on your taxes.”
Now, I’m no tax-loophole-dodging guru, but this seems weird to me. Just off the top of my head, working $8/hour rakes in around $16,000 a year; in contrast, writing off your spouse as a dependent can’t be worth more than several hundred to $1K as a tax credit.
Am I right, and it makes more sense to do the dual-income thing? Or does Mr. Q actually have a point that I’m missing?