I am expecting ~$25K-$30K daycare expenses in 2022 for two kids. Our expected taxable income (AGI - deductions) for that year will be ~$130K-$160K.
It is a benefits enrollment period and we can elect to allocate up to $5K to DFSA. Is it the best option in our case? Thanks in advance.
2022 Dependent Care FSA (DFSA) strategy
Re: 2022 Dependent Care FSA (DFSA) strategy
Yes. Take all the pretax savings you can get
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Re: 2022 Dependent Care FSA (DFSA) strategy
If your outgo exceeds your income, your upkeep will be your downfall
Re: 2022 Dependent Care FSA (DFSA) strategy
Does anyone know if there is any legislation in the works to extend the child care tax credit similar to the way it was done this year?
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Re: 2022 Dependent Care FSA (DFSA) strategy
I'm interested in this topic as well. We probably won't know the limit on DCFSA or if the child tax credits get extended until later this year (if Congress can get it passed at all). I'm considering funding $5k at both of our employers and then dealing with whatever the impact is if the DCFSA limit is only $5k. I'm hoping it's just extra work at tax prep time.
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Re: 2022 Dependent Care FSA (DFSA) strategy
The only answer that can really be given without getting this thread locked is to say there is no clear resolution yet. You'll have to plan for the uncertainty.
Im in the same boat. Will just plan for $5k and try to adjust midyear again if they'll let me justify a qualifying event.
Re: 2022 Dependent Care FSA (DFSA) strategy
PowderDay9 wrote: ↑Fri Oct 22, 2021 8:32 am I'm interested in this topic as well. We probably won't know the limit on DCFSA or if the child tax credits get extended until later this year (if Congress can get it passed at all). I'm considering funding $5k at both of our employers and then dealing with whatever the impact is if the DCFSA limit is only $5k. I'm hoping it's just extra work at tax prep time.
If you can contribute to 2 DCFSAs (2 working spouses, for example), then you can contribute 10k, and if the limit doesnt get extended, then you just have to report the extra 5k as taxable income during tax time. This way, you can hedge in case the limit does get extended but your employer doesnt allow for mid-year changes. For 2021, the limit was increased but the employer wasnt required to let you increase your contribution mid-year and many chose not to.dukeblue219 wrote: ↑Fri Oct 22, 2021 8:35 amThe only answer that can really be given without getting this thread locked is to say there is no clear resolution yet. You'll have to plan for the uncertainty.
Im in the same boat. Will just plan for $5k and try to adjust midyear again if they'll let me justify a qualifying event.