- quote -

Let's say the nonworking spouse planned work next year and
based on this, the other spouse signed up for 5000 FSA
deduction.

And it turns out the job never came through.

At tax filing time the spouse with the FSA deduction
properly adds back the 5000 to wages and pays income tax on
these funds. What law was broken?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Arthur Kamlet wrote:
- quote -

Art, while I agree with your math, doesn't this amount to
fraud? The IRS reg says you must be employed

(both partners) to take the FSA deduction, and there is a
$5000/couple limit. Why wouldn't this approach be viewed
harshly in an audit? Surely you're not 'recommending' this?

Joetaxpayer (at earthlink.net)

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Paul A Thomas <taxman[at]negia.net> wrote:
- quote -

But.....

While it is true that the $5000 pre-tax moneys that were not
included in your taxable wages or social security or
medicare wages will have to be added back into Form 1040
Line 7 as taxable wages subject to income tax, the $5000
does not get added back to social security or medicare
wages. In that sense, you can avoid up to 7.65% soial
security/medicare tax on that 5000.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer for the purpose of > << avoiding penalties that may be imposed on the taxpayer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

<< General Disclaimer: > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer for the purpose of > << avoiding penalties that may be imposed on the taxpayer. > << ================================================== ===== >
anu.melkote[at]gmail.com wrote:

- quote -

On one income? That's great. Start saving for college now,
esp with two.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << Copyright (2005) - All rights reserved > << ------------------------------------------------->

<< General Disclaimer: > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It cannot be used by any taxpayer for the purpose of > << avoiding penalties that may be imposed on the taxpayer. > << ================================================== ===== >
<anu.melkote[at]gmail.com> wrote
- quote -

The short answer is no. He can have money put into a
pre-tax FSA for childcare, but when the return gets filed,
that amount will be taxable.

- quote -

Again, the short answer is no. The amount for two or more
children is $6000 (in 2004). Any amounts above that are not
deductible towards the tax credit, and would be included in
taxable income if both of you contributed $6000 each, or the
combined contributions exceeded $6000.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << Copyright (2005) - All rights reserved > << ------------------------------------------------->

Hello folks!

I have two basic q's on childcare FSA:

1.) Our children (both under five) go to pre-school
part-time. It costs us $8000 but I don't work and I am not
disabled. Will my husband still be able to put $5000 pre-tax
money into childcare FSA and use it towards paying
pre-school tuition.

2.) If I begin working, we will be spending $12,000 for
pre-school and extended care. Can both me and my husband
contribute $5000 each to our respective childcare FSAs and
get a tax break totalling to $10,000?

We are in 33%+ tax bracket with no significant deductions
other than a small mortgage.

LOL,
Anu

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << Copyright (2005) - All rights reserved > << ------------------------------------------------->