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Answer ever part a-g. Show steps if necessary. 2. FSAs (flexible spending accounts) enable you to pay medical and dependent-care expenses above and beyond those
Answer ever part a-g. Show steps if necessary.
2. FSAs (flexible spending accounts) enable you to pay medical and dependent-care expenses above and beyond those covered by your company's medical and dependent-care plans, on a pre-tax basis. The trick is to estimate your medical and dependent-care expenses for the year and determine how much to ask your employer to defer from your yearly salary. For simplicity's sake, assume your company's medical plan has a $1000 deductible and pays 80% of all further expenses. Using the blanks below, calculate the optimum amount to defer into an FSA if you estimate your medical expenses to be $1,800 per year and your childcare expenses are $3,500 per year. a) Estimated yearly medical expenses b) Deductible PAID BY YOU $ c) Amount PAID BY Medical Plan d) Amount PAID BY YOU $ e) Total Medical expenses paid by YOU $ $ f) Childcare expenses needing to be covered by FSA plan $ g) Total yearly out-of-pocket medical/childcare expenses and optimum FSA salary deferral \$ Using the answer from line "g" above, calculate your tax savings for the year. Again, assuming you are in the 25% tax bracket, how much can you save on your income taxesStep by Step Solution
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