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If Ava and Leo take advantage of the plan, they would save income taxes because the reimbursement of child care expenses is excluded from gross
If Ava and Leo take advantage of the plan, they would save income taxes because the reimbursement of child care expenses is excluded from gross income. The income tax savings associated with participating in the plan would be $ 1,440 . In addition, Ava will save $ 459 of FICA taxes due to the reduction in salary. Alternatively, if Ava does not take advantage of the plan, their child and dependent tax credit will be $ 1,200 . Therefore Ava and Leo's income taxes will be $ 459 higher if they do not participate in the plan
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