anyone do flex spend for daycare

Re: anyone do flex spend for daycare

• mlc92404

  January 2010

  Money put into a FSA is put there pre tax, so they are taxing less income and less taxes are being taken out (for example....you make $1000 a month and put $500 a month in FSA....that $500 is taken out first then they only tax the $500 that is left)  If you did not use the FSA they would take your full pay ($1000) and then you would have to pay for day care after that.  Make sense?
  

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• Stilts

  January 2010

  The benefit to this account is that the money is taken out of your paycheck pre-tax, so your taxable income is lowered (therefore the amount of your paycheck that goes to taxes is less). I don't know how you could figure out the exact amount unless you know what % of your paycheck goes to SS, Medicare, Federal & State taxes.

  
  Brendan 06.30.08
  
  c/p 02.26.10

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• 2bWednDec

  January 2010

  yes it just depends on your tax rate.  for us, I assume we save about 20%.

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• Meg&Jesse

  January 2010

  Thanks, yes this all sort-of makes sense.   I was trying to figure it out, like in dollars that we would save, but got all screwed up with the numbers. 

  2bWed - I guess I should just assume we saving "X" percentage, that makes it easier.

  

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• AmyDrinkie member

  January 2010

  The contribution limit for daycare flex spending is $5000 per year.  Your total tax liability to the federal gov't will be reduced by whatever amount you contribute, up to the $5k maximum.

  ETA: I save almost $800/yr by contributing $5k to the DCFSA.  However, you have to pay for the daycare and then file for a reimbursement, so you're out double the money until your claims are reimbursed. 

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