Got a big day care bill? Consider a Flexible Savings Account

During Open Enrollment this year, keep an eye out for the Dependent Care Flexible Savings Account (DC FSA) option.

A DC FSA is a pre-tax benefit account used to pay for eligible dependent care services, such as preschool, summer day camp, before or after school programs, and child or adult daycare.

You can elect to have up to $5,000.00 pre-tax per year deducted from your paycheck to fill up an FSA if you are married and file a joint tax return.

Then, you can use your Dependent Care FSA to pay for eligible dependent care expenses (and decide which payment or reimbursement option to use).

FSA funds must be spent by the participant within the FSA’s plan year or they can be forfeited, so it’s important to stay organized and aware.

But if you feel up for the task, it can potentially keep a few tax dollars in your pocket.