Hi, I earn 70K per year in the state of Texas. I just had a child and am wondering if it would be more beneficial to use the company's dependant child care flex account or should I just claim the child care tax credit at the end of the year? Thanks!
2007-11-17 07:27:14 · 4 answers · asked by SA MOMMY 1 in Business & Finance ➔ Taxes ➔ United States
The most you could get in tax savings from the child care tax credit at your income and with one child is $600.. The answer to which is better depends on your tax bracket, and the amount of expenses that you have, but at a guess, the FSA would probably save you more than that in taxes. Look at your tax bracket and child care expenses, and allowable FSA amount, to calculate what you'd save with an FSA.
2007-11-17 11:18:02 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
You need to figure the tax credit and flex deduction and see which one results in more tax dollars saved.
Probably the flex will be better as you are in a higher marginal bracket than the rate for the credit. Since money put into a flex is lost at the end of the year you could slightly underfund it and take the credit for the rest. Which ever option you decide you must file form 2441 with your return.
2007-11-17 07:42:18 · answer #2 · answered by Charlie & Angie G 4 · 0⤊ 0⤋
Go for the company benefit because it is free money up front. The worst thing that can happen is that you will break even.
2007-11-17 07:32:24 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You can get both. The dependent care FSA will not affect your ability to collect the CTC and/or the Additional CTC. They have nothing to do with one another.
2016-05-24 00:10:02 · answer #4 · answered by ? 3 · 0⤊ 0⤋