Patricia, an unmarried taxpayer who is head of household, has adjusted gross income of $42,800 and incurs $4,000 of child care expenses for part-time care of her 8 year old son, Joshua. Patricia can shelter up to $5,000 (or her expenses if less) in an employer provided childcare reimbursement program or take the Child and Dependent Care Credit. If Patricia elects to participate in the employer provided program and has her expenses deducted from her reported salary instead of using the Child and Dependent Care Credit, what is the amount of her tax savings from choosing this option? Assume the 2020 tax year. DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!

CONCEPTS IN FED.TAX.,2020-W/ACCESS
20th Edition
ISBN:9780357110362
Author:Murphy
Publisher:Murphy
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 52P
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Patricia, an unmarried taxpayer who is head of household, has adjusted gross income
of $42,800 and incurs $4,000 of child care expenses for part-time care of her 8 year
old son, Joshua. Patricia can shelter up to $5,000 (or her expenses if less) in an
employer provided childcare reimbursement program or take the Child and
Dependent Care Credit.
If Patricia elects to participate in the employer provided program and has her
expenses deducted from her reported salary instead of using the Child and
Dependent Care Credit, what is the amount of her tax savings from choosing this
option? Assume the 2020 tax year.
DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!
Transcribed Image Text:Patricia, an unmarried taxpayer who is head of household, has adjusted gross income of $42,800 and incurs $4,000 of child care expenses for part-time care of her 8 year old son, Joshua. Patricia can shelter up to $5,000 (or her expenses if less) in an employer provided childcare reimbursement program or take the Child and Dependent Care Credit. If Patricia elects to participate in the employer provided program and has her expenses deducted from her reported salary instead of using the Child and Dependent Care Credit, what is the amount of her tax savings from choosing this option? Assume the 2020 tax year. DO NOT USE COMMAS OR DOLLAR SIGNS IN YOUR ANSWER!
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