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?Does MN have a state dependent care credit? NY does, and the NY version is refundable.Are the fringe effects big enough to worry about? Say you put $2000 in a pre-tax account, but your actual spending turns out to be $1800 or $2200. What does that do to the analysis? This is not an issue if you know the expenses precisely a year in advance, but sometimes life throws changes at you. I recall the dependent care years as a series of moving from one temporary solution to another, with much less than a year's notice that I needed to find other arrangements.Patzer
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