Children after the age of 18
In the assumption section on the Cost of Children table, the table ends when a child is 18. I suppose the assumption is that children will no longer be part of the consumption equation after 18, but I wonder what to do about children going to college. My expectation is that I would continue to clothe and feed them, take them on trips, buy them things needed for school and for living, etc. How do you recommend we cover these kinds of costs? Should they be entered in as estimates under the Special section? or is there a way to have them continue to be factored into consumption past the age of 18?
RSS
You can change the age of the child and perhaps then make a tweak in the cost of the child in the assumptions area, but you have to be careful because ESPlanner is pretty sensitive to the tax implications of children after, what is it, age 16? I think that a more straightforward solution is what you are suggesting, which is to account for some of those expenses as "special expenditures" and that should cover it.
Dan
Hmmm. I just handled it by telling ESP my kid is younger than he is. What are the tax implications of children older than 16 that you are referirng to?
jfshelton wrote:Hmmm. I just handled it by telling ESP my kid is younger than he is. What are the tax implications of children older than 16 that you are referirng to?
In the tax codes for some states and in parts of the Social Security rules, the benefits/consequences of children are wired to age, not to dependent status, you get some Social Security benefits until your child is older than 16 for example.
The good news is that the latest update (2.10.24A) allows you to specify the age at which your child will leave home. Until this time they are considered dependents for tax purposes (barring the age specific issues mentioned above). Currently the cost of the child over 18 years is the same as that of the child at 18 (.7 of an adult by default). There will be a change to the cost of children tab in the assumptions folder that will allow you to specify a cost for children still at home over 18 years of age. This change should be out shortly.
cshop at onstott.name wrote:In the assumption section on the Cost of Children table, the table ends when a child is 18. I suppose the assumption is that children will no longer be part of the consumption equation after 18, but I wonder what to do about children going to college. My expectation is that I would continue to clothe and feed them, take them on trips, buy them things needed for school and for living, etc. How do you recommend we cover these kinds of costs? Should they be entered in as estimates under the Special section? or is there a way to have them continue to be factored into consumption past the age of 18?
Since you can now have them factored into your consumption and taxes you still need to enter their unusual expenses (over and above that magical .7 number you get for being at home) like college tuition, etc.
Best,
Dick Munroe
gretaperl wrote:
1. I just downloaded the latest update, and I’m not seeing where to indicate the age at which child(ren) will leave home (as Dick Munroe states above). Can you tell me where to find it?
On box 2. on the family information page. When you enter the child's age, you also enter year of leaving the household. FWIW, this is a bit of a design problem: Because this concept came along recently, there is no way to set up a profile with kids leaving at various ages. If you change the ages of leaving the household it would get reflected in ALL the profiles for that family. If you want to "save" various scenarios, create multiple "versions" of your family. (Unfortunately, you can't save profiles across families, sorry).
gretaperl wrote:
2. I assume you would only want to set your child’s leaving-home age at his college-graduation date if he was living at home the whole time he was in college (i.e., attending a local school). If he’s in another state for college for 8 months of the year (therefore, living at home for 4 months of the year), what’s the best way to tell this to ESP? Should I enter a yearly figure for that four-months-worth of support as a Special Expenditure (in addition to his college costs, of course)? Would it make sense to estimate that yearly Special Expenditure by taking our per-adult living standard times 0.7, then dividing by 3 (4 mos. = 1/3 of a year)?
ESPlanner generally works on the whole year. I'm pretty certain it was not implemented that fractions of a year would matter.
gretaperl wrote:
3. Our 28-year-old daughter lives in our home and expects to continue living here for the next several years. She has a job and is paying us a monthly “rent,†which we figured by taking 1/3 of our grocery & utility costs: Mom + Dad + daughter = 3 (ignoring college son in this equation). She pays all her non-food & non-housing expenses out of her own pocket. I started to set up her “rent†as a Special Receipt, but then realized we’re not showing any burden for her support in ESP, because she’s not listed as a child or anywhere else. Rather than going ahead and putting in her “cost†to the household as a yearly Special Expenditure equal to the “rent†she pays, it makes sense to just leave out her costs and her rent altogether, because they’d just be a “wash,†right?
Greta
I'm not certain about this. I'll let Larry respond. I would suggest that you add her contribution as a tax-free special receipt and have another profile where you ignore it and see what impact it has on the bottom line.
Hi, For the moment, please enter the costs for children older than age 18 as special expenditures. I'm going to check with our engineers if there is a problem with changing the interface to allow you to enter birth years for children older than age 18. If we can do this easily, we'll post an update in the next couple of days with this fix. Otherwise it may be until the end of the summer because over the summer we just want to stabilize the current program due to vacation schedules of our engineers.
best, Larry