What is a good strategy to manage FSA Dependent Care accounts. Since the money is "use it or lose it" I want to make sure that I use all of the money I put into that account.
The max contribution is $5,000/yr, I am paid biweekly so that is 26 paychecks per year. $5000/26 = $192.30, so each paycheck I should contribute about $192.
Let's say I have $1,000 of monthly daycare expenses, what do I do if at the end of the year I have like $500 in the account? Should I simply write a check for the balance to daycare to pay ahead for the next month, reimburse myself from the account and then pay the rest out of pocket?
Also how much am I really saving by using the dependent care fund? If I contribute the max of $5000/year, that is $5000 less taxed money. If I in 22% tax bracket based on 2019 U.S. Tax Brackets. Am I saving $5000 * 0.22 per year ($1100)? How do state taxes and social security come into play there? is the $5000 * (0.22 + percent of state taxes / social security)?
thanks in advance!