Did you know you could get a 22–37% discount on your childcare or dependent care expenses just by using pre-tax dollars? In today’s episode, I dive into the often-overlooked but highly valuable Dependent Care Flexible Spending Account (FSA). While Health FSAs and HSAs get plenty of attention, Dependent Care FSAs can offer significant tax advantages—especially for dual-income families or single parents.
I break down who qualifies, what kinds of care are eligible, how much you can contribute, and what special considerations apply if you're divorced, filing separately, or classified as a highly compensated employee.
Whether you’re a physician with young kids or caring for a dependent adult, understanding how to use this account effectively could save you thousands.
In this episode, you’ll learn:
- How Dependent Care FSAs work and how they differ from Health FSAs
- Who qualifies as a dependent for reimbursement
- What expenses are eligible (and what’s not)
- Key contribution limits for 2025 and special rules for high-income earners
- How divorce and custody arrangements affect eligibility
- How to coordinate Dependent Care FSAs with the Child and Dependent Care Tax Credit
- Common mistakes and nuances to watch out for
Resources Mentioned:
IRS Publication 503: https://www.irs.gov/publications/p503
Episode 137: Flexible Spending and Healthcare Savings Accounts
Disclaimer: I am not a CPA. Please consult your tax advisor for personalized guidance.
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Dr. Elisa Chiang is a physician and money coach who helps other doctors reach their financial goals by mastering their money mindset through personalized 1:1 coaching .
You can learn more about Elisa at her website or follow her on social media.
Website: https://ww.GrowYourWealthyMindset.com
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