[sundara]

Another thing to consider is the adoption tax credit. Since you ended up with 3 siblings, you should be able to take this credit (10K per child) WITHOUT having to prove special needs (as sibling groups of 3 or more automatically qualify as special needs) and use it over 5 years. This is a huge item, and has the potential to change your calculation of daycare vs working as well.

And credit is MUCH better than a tax deduction. A credit does not reduce the income that is taxed, it goes directly against the total taxes owed. Here is how the credit works (NOTE: I am not a tax person, so these numbers are NOT accurate - this is only an example - PLEASE CONSULT A TAX PERSON):

credit:
Assume you have $40,000k income and this would cause a $6000 federal income tax (at flat 15%). Apply the adoption credit and you owe zero taxes that year (a savings of $6000 dollars). You have used up $6000 of your $30K tax credit, meaning you still have $24000 left for the following 4 years.

The following year, you again have $40,000k income and this would cause a $6000 tax again. Apply the adoption tax credit to this and you owe zero taxes (again) and have $18000 in tax credit left.

Keep repeating until the tax credit is all used up or 5 years of tax savings has passed (in the example above, both would occur in the 5th year). Net result, you really do have $30k in REAL money saved.

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In a real world example, you have other deductions already (standard deduction, maybe home mortgage, 401K, etc), so you would probably not use up all of the credit. Due to this, it might actually pay to go to work after all. You should talk to a reputable CPA about this and ask them to run some scenarios for you.