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Subject:  Re: Dep Care credit vs Pretax acct Date:  3/25/2013  2:38 PM
Author:  TMFPMarti Number:  118147 of 127637

AGI of $55k, total dependant care expenses of $2k.

Putting all $2k in a pretax account will reduce my AGI and save me at my marginal 15% Fed rate and 7.05% MN rate = $441.

Claiming all $2k as qualified expenses instead will get me 20% back as Dep Care Credit = $400.

What am I forgetting?

MN may also give a credit, BUT if you use the pre-tax you also avoid SS & Medicare on the amount. No-brainer for the pre-tax account.

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