Dependant care

[Taxlady2021]

Husband and wife each have $5000 in a FSA with their employers. 2 children in day care with $19000 in expenses. The $10000 is coming up as taxable. Please advise. 

Thank you

• Kathy

[sjrcpa · Accepted solution]

I'm pretty sure $5,000 is the nontaxable limit, so $5,000 is taxable.

Check your entries for the $19,000 expenses. Something must be wrong to have $10,000 show up as taxable.

[rbynaker]

I agree with SJR.  One $5,000 limit for MFJ.  This landed in "Industry Discussions" so if you let folks know what software you're using (ProSeries / Lacerte / PTO) we might be able to point you to some data entry issues.

If you look at the 2441 you have to approach this from both directions.  1) Here's who got paid and how much.  2) Here's how much it costs to care for these dependents.  So you'll need to give the software the breakdown of both sections.

I would expect $5,000 added to taxable wages with a "DCB" notation.

[Taxlady2021]

Thank you 

[sjrcpa]

You're welcome.