Is the cost of caring for your kids or aging parents eating a big chuck out of your household budget? If so, dependent care flexible spending accounts can help.
A dependent care FSA can save you up to 40% on the first $5,000 you spend on dependent care services that allow you to work or look for work. This means your annual savings could be as high as $2,000!
Common expenses covered with a dependent care account include before and after school care, summer day camps, elder care, day care and babysitting services.
When setting up an account, be sure not to set aside more than you need. At the end of the plan year, any unspent funds in the account will be forfeited.
“In the past two years I have had to have significant dental work done to correct bone and tooth loss that was occurring in my upper jaw. Since my dental plan was good, but not unlimited, I loaded up my FSA with the maximum amount, and I am really glad I did because I had more than $3,000 in dental fees beyond what my plan covered. ”
Annual Savings: $2000