Dependent Care Reimbursement Account Worksheet

  Filing Status Single
Married
  DEPENDENT CARE TAX CREDIT (2017) Your Calculations Example
1. Estimate your total annual earned income before taxes (include your spouse’s income, if applicable). 60,000
2. Estimate your cost of dependent care. 1 Dependent = $3,000 Annual Maximum. 2 or more dependents = $6,000 Annual Maximum. 3,000
3. Based on your total earned income (Item 1), select the appropriate tax credit from the table below, and enter your percentage.
 
DEPENDENT CARE TAX CREDIT TABLE
0
-
15,000
 ..... 
35 %
29,001
-
31,000
 ..... 
27 %
15,001
-
17,000
 ..... 
34 %
31,001
-
33,000
 ..... 
26 %
17,001
-
19,000
 ..... 
33 %
33,001
-
35,000
 ..... 
25 %
19,001
-
21,000
 ..... 
32 %
35,001
-
37,000
 ..... 
24 %
21,001
-
23,000
 ..... 
31 %
37,001
-
39,000
 ..... 
23 %
23,001
-
25,000
 ..... 
30 %
39,001
-
41,000
 ..... 
22 %
25,001
-
27,000
 ..... 
29 %
41,001
-
43,000
 ..... 
21 %
27,001
-
29,000
 ..... 
28 %
43,001
-
and up
 ..... 
20 %
20%
4. Multiply Item 2 by Item 3 to estimate your Dependent Care Tax Credit. 600.00
  DEPENDENT CARE TAX SAVINGS (2017) Your Calculations Example
5. Estimate your adjusted gross income (Total taxable income, i.e. salary, dividends, interest, capital gains, etc.) 60,000
6. Less your personal exemption allowance ($4,050 per exemption) -12,150
7. Less your itemized deductions or the standard deduction ($6,350 single or $12,700 for married filing jointly). -12,700
8. Taxable Income (Item 5 minus 6 and 7). 35,150
9. Enter marginal tax rate. To estimate your marginal tax rate, compare the amount shown in Item 8 with the table below.
 
SIMPLIFIED MARGINAL TAX TABLE
Single TaxPayer
Married Filing Jointly
Estimated Marginal Tax Rate
0
-
9,325
 
0
-
18,650
 ..... 
23.65 %
9,326
-
37,950
 
18,651
-
75,900
 ..... 
28.65 %
37,951
-
91,900
 
75,901
-
153,100
 ..... 
38.65 %
91,901
-
191,650
 
153,101
-
233,350
 ..... 
41.65 %
191,651
-
416,700
 
233,351
-
416,700
 ..... 
46.65 %
416,701
-
418,400
 
416,701
-
470,700
 ..... 
48.65 %
418,401
-
and up
 
470,701
-
and up
 ..... 
53.25 %
23.65%
10. Estimate your cost of dependent care. If you are single, or married and file a joint income tax return, you can list expenses up to $5,000. If you are married and file separate income tax returns, you can list expenses up to $2,500. 5,000
11. Multiply Item 10 by Item 9 to estimate the tax savings. Estimated DCRA Tax Savings 1,432.50

WHICH IS BETTER?
In the example on this worksheet, based on a married taxpayer filing jointly with one child, the tax savings available under the Dependent Care Reimbursement Account is estimated to be $1,432.50, while tax savings using the Dependent Care Tax Credit is capped at $600.00. To make sure the option you select is best for you, consult a tax adviser.
* Assumes 6% state tax rate and 7.65% FICA (FICA is reduced on an individual salary in excess of $127,200 in 2017).

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