"A.G. Kalman" <agk202[at]netscape.net> wrote:

- quote -

I didn't jump off or on any horses. I mentioned Dependent
Care Acct just because I have both and they are handled
differently. That difference was my original question.
However, you keep implying that if I can hide something from
IRS I will,which is not why I asked the question in the
first place. So in your allegory: stop beating this horse.
You didn't have to answer in the first place.

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Meesha wrote:
- quote -

You originally asked a question about a "Flexible Medical
Account." You now appear to have jumped off that horse and
jumped onto another horse. It now appears as though you
have a flexible spending account that includes DCAP benefits
as well as medical benefits. The medical benefits issue is
closed and as far as I am concerned, so is the DCAP issue.
The Form 2441 or the 1040A Schedule 2 instructions are quite
clear on how you handle reimbursements from your employer
for dependent care expense. There are basically two steps:
one to see if any of your benefit is taxable and has to be
entered on Line 7; and one to see if after getting the
benefit you are still eligible for the credit and that you
use the proper numbers to calculate the credit.

I'm sorry to keep coming back to this but I say again, why
does it matter what the IRS knows or doesn't know as long as
you conform to the law and have the necessary documentation?

--
Alan
http://taxtopics.net

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"A.G. Kalman" <agk202[at]netscape.net> wrote:

- quote -

I am asking because the calculation for my dependant care
flex. account is performed explicitly on the form,while
calculation for medical account is performed implicitly by
me. So I am asking to make sure that I am not missing
something. My numbers will add up, I just want to know that
I am doing this correctly.

Thank you

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Meesha wrote:

- quote -

You state that you incurred $8000 of medical expense and
that your flexible spending account reimbursed you $3000.
You also state that you are aware that you never paid income
tax on that $3000 and that you are not allowed to take a
deduction for that $3000. You have a firm grasp of the law.

So... why are you asking what the IRS knows or doesn't know?
Your allowable medical expense is $5000.

--
Alan
http://taxtopics.net

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Last year I saved $3000 in Medical Flex Account, I had $8000
in deductible medical expenses. I understand that I have to
subtract $3000 from that amount to prevent double-dipping.
However,my contribution to FSA is not specifically reflected
on any forms (on W-2 my taxable income is reduced by $3000
and that's it). How will IRS know that I already subtracted
the reimbursement from FSA. Another is there any place on
tax form that will explicitly show my calculation? I ran it
through TurboTax and it never asked me for anything like
that. I have all supporting paperwork.

Thanks in advance

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