Dependent Care Reimbursement Account Worksheet

Filing Status

Single

Married

DEPENDENT CARE TAX CREDIT (2008)

Your Calculations

Example

Estimate your total annual earned income before taxes (include your spouse’s income, if applicable).

45,000

Estimate your cost of dependent care. 1 Dependent = $3,000 Annual Maximum. 2 or more dependents = $6,000 Annual Maximum.

3,000

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%

Multiply Item 2 by Item 3 to estimate your Dependent Care Tax Credit.

600

DEPENDENT CARE TAX SAVINGS (2008)

Your Calculations

Example

Estimate your adjusted gross income (Total taxable income, i.e. salary, dividends, interest, capital gains, etc.)

45,000

Less your personal exemption allowance ($3,500 per exemption)

-10,500

Less your itemized deductions or the standard deduction ($5,450 single or $10,900 for married filing jointly).

-10,900

Taxable Income (Item 5 minus 6 and 7).

23,600

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 - 8,025 0 - 16,050 ..... 23.65 %
8,026 - 32,550 16,051 - 65,100 ..... 28.65 %
32,551 - 78,850 65,101 - 131,450 ..... 38.65 %
78,851 - 164,550 131,451 - 200,300 ..... 41.65 %
164,551 - 357,700 200,301 - 357,700 ..... 46.65 %
357,701 - and up 357,701 - and up ..... 48.65 %

28.65%

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, the tax savings available under the Dependent Care Reimbursement Account are $1,432.50, while using the Dependent Care Tax Credit provides a savings of $600. 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 $102,000 in 2008).}

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