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Author: zapata001 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Dependent care FSA, W-2 and child care expenses Date: 3/20/2009 1:03 PM
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Hello all,

Have a question about dependent care FSA, W-2 and child care expenses. My 2 kids went to daycare for most of 2008. I spent about $16000 on those expenses. My company provides for dependent care FSA where I put $5000 (Max allowed)

The problem is, my W-2 does not show anything in box 10. I talked to HR and I am told, they don't have inform IRS about it by showing it in Box 10. It is their choice if they want to put it in that box and they decided not to put it. Does not make sense to me. I tried to fight with HR but with no success and since I am one of the very few ones in this situation (2 kids both in day care and with eligible expenses totaling over $6000) I will have tough time to convince them otherwise.

Now my calculations shows, max of $6000 in expenses is what I claim to calculate credit and I should subtract $5000 from it that I got from dependent care FSA. So I get $1000 * 0.20 = $200 credit.

My problem is, since my W-2 does not show this $5000 fsa contribution, can I still enter that in box 10 in TurboTax and let it do the above calculation? By doing that, information I enter in Turbotax W-2 will not match the employer provided W-2 to IRS. Is that mismatch going to be a big red flag and cause lot more problems that $200 credit that I will get?
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 105294 of 121219
Subject: Re: Dependent care FSA, W-2 and child care expen Date: 3/20/2009 1:32 PM
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can I still enter that in box 10 in TurboTax and let it do the above calculation?

Yes. To quote Phil - if you don't know how to lie to the software, you have no business using it.

By doing that, information I enter in Turbotax W-2 will not match the employer provided W-2 to IRS. Is that mismatch going to be a big red flag and cause lot more problems that $200 credit that I will get?

Nothing big. At worst, you might (emphasis on might) get a letter. But all you'll need is to have your paycheck stubs to show the FSA deduction and the omission of it on your W-2.

--Peter

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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 105295 of 121219
Subject: Re: Dependent care FSA, W-2 and child care expen Date: 3/20/2009 1:49 PM
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can I still enter that in box 10 in TurboTax and let it do the above calculation?

Yes. To quote Phil - if you don't know how to lie to the software, you have no business using it.


Alternatively, you could look to see whether TurboTax lets you enter $5000 to Line 14 of Form 2441 without having to have it come from a W-2. If it lets you do that, you can produce the correct result while entering a W-2 that matches what you received. Forms mode can be your friend.

Patzer

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Author: zapata001 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 105344 of 121219
Subject: Re: Dependent care FSA, W-2 and child care expen Date: 3/22/2009 9:36 AM
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Apologies for delay in appreciating such a prompt reply from Peter and Patzer. Highly appreciate it :-)

I will try the forms mode but if could not, I feel comfortable with Peter's idea. I have the last paystub from Dec that shows the dependent FSA contribution. If IRS asks, I can show them that. Would have liked to avoid all this and may be could have just put in the whole expense of child care for credit (As some people in the company seems to have done, mostly unknowingly I think) but that will be cheating.

Have a nice Sunday !!

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