Flexible spending account or child care tax credit?

Any financially saavy mommy's or daddy's out there? Which one do you use?

Re: Flexible spending account or child care tax credit?

You can only get $3000 max on the child care tax credit and $5000 max on the flexible spending account so it made more sense for us to the max in the Flex account.

BUT you have to be prepared to pay for child care and have the money deducted from you paycheck as well(before tax). You can get paid back from your flex account on a monthly basis, which reminds me I need to send mine in.

Your taxable income goes down if you use the flex account as well which is a double savings, if like my DH and I you make too much money according to the govt.

Re: Flexible spending account or child care tax credit?

Any questions feel free to FM- I did a LOT of research on this when I went back to work.

Re: Flexible spending account or child care tax credit?

Yeah, I just did a little googling research and it looks like, for us, the flexible spending account will give us a greater benefit.

I'm assuming that, if you use the FSA, you cannot claim a credit for childcare expenses, even if your expenses go way beyond the $5000 pretax deduction for the HSA? For us, Alex's school is $11,000 a year, so even if we have $5000 deducted pre-tax, that still leaves $6000 - we can't claim that amount for the childcare credit, right?

For reimbursements - is it possible for me to still pay the school tuition on my credit card and then ask for reimbursement? Or does the FSA reimbursement go directly to the school? I'd like to still get airline points by using my credit card.

Re: Flexible spending account or child care tax credit?

I don't know what this is...can someone explain to me from scratch ?

Re: Flexible spending account or child care tax credit?

OK for me the reason why I didn't choose the flex care is because of the 5k limit and that I cant pay out monthly only yearly so I would need to make payments to day care and payments to my account simultaneously. So for a year it would be really rough. After the year when I get the money from my flex account I could then use it to pay my daycare the following year but Bryans day care is 12.5K each year I supposed it would be more benifical but I cant afford to go this route because of the yearly payout. Im considering it though when I get my raise.

Re: Flexible spending account or child care tax credit?

We have a FSA and it works well for us.

Re: Flexible spending account or child care tax credit?