Child and Dependent Care Tax Credit vs Dependent Care FSA - 2022
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- čas přidán 1. 08. 2024
- Today we discuss how the Dependent care FSA affects the child and dependent care tax credit for 2022. How it works on the IRS Form 2441, and how they save you on taxes.
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🔴 Dependent Care FSA: • Dependent Care FSA
🔴 HSA vs FSA: • HSA vs FSA
🔴2021 Child Tax Credit Payments - IRS Notice: • 2021 Child Tax Credit ...
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00:00 Intro
00:21 How Dependent Care FSA affects Child and Dependent Care Tax Credit
01:03 What is more beneficial Dependent Care FSA or Child and Dependent Care Tax Credit
01:20 2022 contribution limit Dependent Care FSA
01:42 2022 Max Child and Dependent Care Tax Credit work-related expense
02:00 2022 Example #1 Dependent Care FSA vs Child and Dependent Care Tax Credit
02:00 2022 Example #1 Dependent Care FSA vs Child and Dependent Care Tax Credit
04:07 2022 Example #2 Dependent Care FSA vs Child and Dependent Care Tax Credit
05:16 2022 example of Form 2441 how the Dependent Care FSA affects Child and Dependent Care Tax Credit
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
#DependentCareFSA #ChildDependentCareTaxCredit #IRS
Bookmarking this one incase I have a kid. Nice video, great content, lighting and audio quality. A+
THANK YOU!
Thanks for your video, My family and I are relocating to the USA from Canada. This is a great primer in helping navigate a whole new tax system. Cheers!
Exactly what I was looking for
You also save FICA on Dependent Care FSAs, so factor in an extra 7.65% savings on that contribution.
Really nice explanation. Liked it.
Glad you enjoyed!
You should have added the s/s so we can download and plug numbers
Thank you for the the great explanation, What about HCE? are there DC-FSA limitations there?
Thank you! Not that I know of.
In your example you show using $5,000 from FSA and then $1,000 left over from the Dependent Tax credit, but I thought you can't use both of those for daycare. I thought it was one or the other - no?
Can you use the FSA to pay for daycare/preschool if the child lives with you less than 50% of the year? I know the Child Tax Credit is not available if less than 50% and I cannot list my child as a dependent but if I still pay for my child's daycare, can I use the FSA and just part 1 and 3 of 2441?
Does the Dependent Care FSA also lower Payroll taxes as well?
Can I use the FSA to pay for my live in Au Pair & their food & expenses which I pay for?
Great presentation however it would have been better if you had started with 2022 1 child sheet
So for one child scenario as the limit is 3000 for dependent care credit only FSA of 5k would be eligible? And we cannot claim both right?
@@xplorehari correct
What if you live in a State with no State Taxes? I assume the FSA would not apply?
Can you add the spreadsheet, or help with formulas to calculate
Married, NC 156k annually
Only 15 states provide a child and dependable care refundable credit.
Are the FSA debit funds avalible as soon as FSA is deducted from my paycheck? Will I be able to use the FSA debit card to pay for child care the nest month? -OR- is FSA deducted from my paycheck and I still have to pay for child care out of pocket only getting a re-embursment at the end of the year (only after a request)?
Unlike a healthcare FSA where the entire amount is available Jan 1 (or your first paycheck), the Dependant FSA is not. So if you have $150 take out of each paycheck, that $150 will be available come payday (or maybe a day or two) So the entire $5000 is reached on your last December paycheck. For me, I wait till the end of December to file a claim for the entire $5000
My wife and I are going to spend WAY more than 5000$ on child care next year. Is it still beneficial for us to do the dependent care FSA?
Did you figure this out I’m gonna spend over 15k
my child doesn't have ssn. so i can't use dependent care credit. can i enroll in dependent care FSA?
Can you get the credit if you employed a home daycare or nanny?
Simple answer is yes. Tough part is you will need this reported properly (payroll) in order to claim the credit. The following link is a good guide on how to do this. www.wikihow.life/Pay-Household-Employee-Taxes
If I incorrectly opted for dep care FSA how can one get money back?
I recommend reaching out to the plan you opted in to get this answered.
Wait, I thought a tax "credit" was a dollar-for-dollar tax bill reduction? Isn't a deduction when you reduce taxable income so you save the amount you would be taxed on that income like you are showing? That's what is confusing me. I think there is a lot of bad information online. I just read an article explaining how the child dependent care tax credit is an actual tax credit, like the actual child tax credit. But according to this video, it's a tax deduction, not a tax credit. I was very confused when I saw that the FSA money reduces the tax credit eligibility dollar-for-dollar when I was doing my taxes just now. This didn't make sense because if the childcare tax credit is a tax credit like the child tax credit, then it would NEVER make sense to use the FSA option because a $3000 lower tax bill is more savings than any existing income tax bracket from the maximum $5000 FSA account. You'd have to be paying 60% tax rate or more on that $5000 for the FSA route to make sene.
Hey! I will be going over your comment in my upcoming livestream! Hope this helps! If you have any other questions I go live every Monday at 4P.M. PST. czcams.com/users/liveSHkqV4_UN90
I am thoroughly confused now :-) I contributed $5000 in 2023 for dependant FSA. I used it for preschool expenses. Filling out my taxes, it's like I never had that money deducted. It reduced my total taxable income. But come box 10 on the 1040, I had to add it back and it added that $5000 back to my taxable income. Why?
You need to show on form 2441 that you actually used the $5000 towards qualified expenses; this is calculated on Part III of Form 2441; if no dependent care expenses are input, then the dependent care benefits get added back to your taxable income.
@@gaylep4404 thank you. That’s what I did. I actually have something like $15,000 in expenses because of the preschool she goes to. But for whatever reason I was not able to deduct all of it. Because I just have one child and I’m thinking that might have something to do with it. I’ll take a look at that form and see if I made it miscalculation or error when I filed.
Do you have to be married?
No