Myself and spouse are both active duty and have two kids in daycare. We’re just now finding out about DCFSA but aren’t finance savvy. Is the program worth it for us to enroll in? I understand it’s pre-taxed and lowers our taxable income, but if we’re spending over $32k does it actually do anything for us?
DCFSA Actually worth it?
byu/Upset_Career_1376 inMilitaryFinance
Posted by Upset_Career_1376
3 Comments
Yes it’s a no brainer. You will have 5k tax free – saving up to 1500/year in taxes depending on your bracket.
Maybe 10k since you’re both active… not sure
Would you rather pay taxes on all of that 32k or only most of that 32k?
My wife and I are both AD, it’s a 5k household limit so between the two of us I’m the only one who has it set up. Why would you not want to lower your taxable income? Just note when it comes tax filing time this will lower the amount of Dependent Care Tax Credit you can claim. Also the amount is automatically withheld from your paycheck when you set it up and you have to submit receipts annually for your expenses or you lose the money in the account.