The Dependent Care FSA is an important subject from its origins. Namely, it takes care of every American’s critical issue – taking care of our dependent elders and our children. While this usually can be a huge expense for many Americans, the Dependent Care FSA is designed to ease things a bit, especially because every cent you put on that FSA will be tax-free.
If you are eligible for the program, you’d have to set it up through your workplace. In that case, you’d have your employer authorized to withhold a pre-fixed amount from your paycheck. Each and every one of the paid period depositions will be done by the employer in your Dependent Care FSA. While your primary benefit from your FSA may be the lower taxable income, it can help you to manage your health care bill, as well as the medical bills of the people that qualify as your dependents. Very different from the Health Care FSA, the Dependent Care FSA, covers the expenses of a child or adult daycare, preschool, or before/after school programs.
Also, you may want to pay all costs out of your pocket and then keeping the receipts to apply for reimbursement. That is just one of the options on how to pay expenses using your Dependent Care FSA, as you can keep choosing to pay everything directly with the DCFSA money.
This money will be automatically deducted from your paychecks and transferred to the DCFSA, you won’t care about anything except for making the right use of the money.