AM wrote:

- quote -

FSA permits pre-school expenses. The Tuition for the
Kindergartener is not allowed, but the summer camp for both
are allowed, up to the $5K max.

To be clear, there's no 'deduction', per se, the DCA is
pretax money held from your income. You submit for
reimbursement through eligable expense submition to your
employer. The $5000 is then noted on your return as box 10
of the W2 and form 2441, the Child and Dependent Care
Expenses form.

JOE

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AM wrote:

- quote -

Unless someone has changed the safe-harbor rules, payments
to pre-school (i.e., pre-kindergarten) are deemed to be for
"care" of the child and not "education" of the child. As
such, they qualify for the tax break.

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- quote -

You are correct.

IRS Publication 503, on page 6, states: "Education.
Expenses for a child in nursery school, pre-school, or
similar programs for children below the level of
kindergarten are expenses for care"

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I have two kids three and five attending a private school.
My younger child is in pre-school and the older is in
kindergarten. For the calendar year 2004, school and summer
camp (9:15 AM - 4:00 PM), costed us $20K for both children.
It was roughly $9K for my three-year-old and $11K for my
five-year-old.

I had enrolled in Dependent Care FSA and got $5K tax
deduction for the care expenses of my three year old. I did
not claim anything for my five-year-old.

My spouse and I work full time and our combined AGI for this
is year over $250K. Our tax counsel says that I am not
eligible for this $5K deduction because my three year old
attended a pre-school and not a daycare. I was under the
impression that any care provided to a pre-kindergarten aged
child whether it is in a pre-school, daycare, or registered
babysitter - all qualify for this tax break. Please advise.

Thank you for your time!

Regards,
AM

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >