This is what I have to keep telling myself now that I am participating in the Dependant Care Flexible Spending Program at work. I'll get it back.
Here's how it works. I am allowed to set aside up to $5000 from my paycheck, tax free, to be spent on child care costs. Pretty cool, right. 5 grand tax free! At the end of the day, this means that we will save about $1400 in taxes. What could be the problem?
The problem is...I don't get it back from benefits until I spend it. Therefore...for about the next 5 months, I will be spending $1000 per month on daycare, as usual. AND...Microsoft will be taking $416 out of my paycheck every month.
$416. That's a substatial amount of cash. I just got my first paycheck with the deduction and, sure enough...$208 less. Ouch.
Ouch ouch ouch.
But...I'll get it back. I'll get it back and the Feds won't get any of it!!! I'll get it back and I'm saving $1400 by doing this. It's like having a savings account that gives me 28% interest. Actually...it's not like that. It's my money, I just get to keep more of it.
To do this, however, I just need to spend the next 5 months eating Ramen and Mac and Cheese.
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1 comment:
On our flex spending account, you can actually put in for the money as soon as it's spent...in other words, every month that you write out the ck to Desi's daycare, you can immediately send in the receipt and as long as you have that amount in your flex fund, they'll reimburse you.
I, on the other hand, save it up for the year and then have my plane ticket money for Seattle... but ours is a lot less than $5000.
Love,
Desmond's Grandma
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