Hi, @JohnB5677.
I'm afraid you misunderstood my question as being about healthcare FSAs. My question is about Dependent Care FSAs. It also doesn't get to the issue of why the FSA contributions are being added back to my income and I can't enter expenses in TurboTax. I understand how the FSA works. I made voluntary contributions, which were deducted from my paycheck and deposited in a DCFSA account. I then made qualified expenses and the DCFSA service provider disbursed the funds.
This is where you lose me:
> Unlike HSAs or Archer MSAs which must be reported on your Form 1040, there are no reporting requirements for FSAs on your income tax return.
The FSA deductions are not included in my main income (W2 box 1). But they are included on my W2 as "dependent care benefits" (W2 box 10). This then gets added back to my income on the 1040 line 1e, which then gets added back to my AGI. So my tax liability ends up including these funds, which were supposed to be exempt from income tax. Why would that be? The only thing I can think of is that it's because TurboTax doesn't know that I spent the funds, and there is no way to enter that on the form because I am ineligible for the dependent care credit. Does that make sense? What do you think I am missing?
