Why is the entire $5000 dependent FSA show up on 1040, Line 1e?

[K9Monterey]

I am using the desk top version of TT. So here is my issue

I work full time, wife does not (no W2 or 1099-just dividends) We file married/jointly. MAGI is WELL below that $400k I had a dependent FSA for pre-school expenses. I put in $5000 (so employer withheld $x each paycheck) I claimed the entire amount, so $0 left over. I understand why $5000 shows up on box 10 of W2. What I don't understand is why the entire amount of $5000 shows as taxable on line 1e of my 1040?

So why does that entire $5000 show up as taxable now? Is it because my wife doesn't work? Last year she made just about $2k on a 1099 and that taxable amount on 1e was the difference of $5000 minus what she made (give or take). I elect to have a dependent FSA for the tax break. But then when it comes time to file taxes, I have to add it back in there on line 1e? So I am thoroughly confused now 🙂 Child meets all requirements.

Show less

Reply

[abctax55]

Hi there,

You’ve come to an Intuit site supporting tax professionals, and you may be looking for support as an individual taxpayer. Please visit the TurboTax Help site for support.

Cheers!