FOR YOUR BEST INTEREST
Carolyn Morain, Director of Business Operations
Let’s Talk Taxes
My name is Carolyn Morain and I am the new
Director of Business Operations taking over since
the retirement of our beloved Paul Pelletier. Paul
shared his wisdom, counsel and knowledge of
the Food Program for 25 years and will be missed
by everyone. My job is to oversee all issues
regarding compliance on the program so when
there are changes in regulations, I will be one of
the first to get involved. I also oversee business
elements such as Human Resources, budgeting/
finance, administration and more.
I invite you to read my bio for more information.
The purpose of
today’s article
is to talk about
taxes.
With
April 15 behind
us, I want to
reaffirm
your
choice
to
continue
to
participate
in the Food
Program. We sometimes hear that providers are
being advised to stop participating in the Food
Program because the extra income could push
you into a higher tax bracket. I’d like to counter
those comments with some facts.
$73,800 of your taxable income and you would
only pay the 25% rate on the additional $1,200.
After taxes, you are ahead by $4,130!
A rare occurrence
Now let’s take what your combined income is
today. Not everyone, but a fair number of you
are in that 25% tax bracket with a combined
income in the broad range of $75k - $150k per
year. In the vast majority of cases, receiving an
extra $5,000 per year will not push you up into
the next tax bracket.
Think of it as a raise
Lastly, think about what you would do if your
spouse came home from work and announced
that she/he got a $5,000 raise. Would you tell
her/him to say “no thank you”? Of course you
wouldn’t. If anyone you know is encouraging you
to drop out of the Food Program for tax reasons,
I invite you to share Tom’s Copeland’s article,
Common Objections to the Food Program.
You can also look over our basic examples of
how the Food Program helps you make more
money by visiting the Providers Choice website.
Outside of the financial reasons, it just makes
good business sense to participate. Remember,
there are other reasons to participate – to grow
healthy and strong children!
Only on the extra
First, let’s look at a tax table. For purposes of
today’s discussion, let’s assume you are married
with a combined income of $70,000. This would
put you in the 15% tax bracket. Now let’s say you
anticipate receiving $5,000 during the year in
Food Program reimbursements. This will put you
into the 25% tax bracket by $1,200. Whoa! I am
going to owe tax equal to 10% more on all of my
income? NO! You would still pay 15% on the first
10 P R O V I D E R S V O I C E
“
Providers who participate
on the Food Program earn
more after tax dollars,
than providers who don’t
participate.
_
”
Tom Copeland, Attorney and Tax Consultant