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Originally Posted by Viju My wife was diagnosed with degenerative disc disorder last year. I had put 5000 in child care**FSA as she was not able to take care of our 2 year old kid full time. She also suffers from planter fasciitis so can't stand for a long time. Can I claim child care expenses due to her medical condition.
I have medical report and X-rays to support . |
no double deduction on the exp paid from fsa. A flexible spending account allows you to set aside some of your pre-tax income for medical costs and dependent care. Because the money is taken out before you're taxed, you have a lower adjusted gross income, which lowers your federal taxes. Since the money you put into an FSA is already deducted from your taxes, you can't deduct your FSA expenses on your return.
The irs offers working parents two ways to reap tax savings from the cost of paying for child care while the parent or parents are at work or in school. One is the Dependent Care FSA,.A dependent care FSA allows you to take money directly out of a paycheck and move it to an account specifically set aside for paying the cost of child care. You may set aside up to $5k for two or more children, or $2.5k for one child. The account is used to reimburse parents for payments made to baby-sitters or daycare centers for child care provided so the parents could work. The money is taken out ofyourpaycheck pre-tax. This means that you do not have to pay federal taxes on this amount. In addition, this money is not subject to the 7.5 percent Medicare tax. The higher your tax bracket, the more tax savings this option will reap. In the 25 percent tax bracket, for example, the savings would actually be 32.5 percent of up to $5k, or a maximum tax savings of $1,625.