Thank you VincentL10583. That makes sense and is very helpful.
A few more questions:
5) Spouse #1 (with higher AGI) will claim the child and open a Dependent Care FSA. From what we can tell, under married filing separately status the max contribution to a Dependent Care FSA is either $5,250 or $2,500. Please confirm.
6) Spouse #1 already has a Health Savings Account (HSA) established with their Consumer Driven High Deductible (CHDP) Medical Plan. Can Spouse #1 use their HSA in addition to the Dependent Care FSA to pay for child care expenses for child? (due to being on the same tax return. Or are HSA funds only reserved for Spouse #1's medical expenses?)
7) Spouse #2 has better and broader health insurance options (HMO) and will add child to their health plan. It seems logical that Spouse #2 cannot use their current FSA to pay for child care expenses since child will be a dependent on Spouse #1's tax return. Please confirm.
Thank you!
