Thanks again Texas Roger - appreciate your help on this.
Regarding your answer in (3), I am confused because I have found conflicting information - please see the info below, and based on this, can you still confirm that amounts contributed to an FSA for dependent care ARE in fact subject to Social Security tax and Medicare tax?
Please, take a look at information below, which seems to suggest otherwise:
1) "Amounts contributed to an FSA are not subject to federal income tax, Social Security tax or Medicare tax, allowing your medical or dependent care expenses to be paid with pre-tax..."
<a rel="nofollow" target="_blank" href="
https://ttlc.intuit.com/questions/4267053-do-we-pay-tax-on-forfeited-dependent-care-fsa">https://ttl...>
2) "Whether pretax deductions count as Medicare wages depends on the type of deduction. Pretax benefits include those offered under a cafeteria – or Section 125 – plan, such as medical, dental, vision, life, accident and disability insurance; and flexible spending accounts such as dependent care, and health savings and adoption assistance reimbursement accounts. Also, qualified retirement contributions, transportation expenses and educational assistance may be pretax deductions.
Most of these benefits are exempt from Medicare tax, except for adoption assistance, retirement contributions, and life insurance premiums on coverage that exceeds $50,000"
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https://finance.zacks.com/pretax-deductions-count-medicare-wages-3522.html">https://finance.zacks.co...>
3) "By putting $5,000 into your Dependent Care FSA, you saved 25% ($5,000 x 25% = $1,250) as well as 7.65% for Social Security and Medicare ($5,000 x 7.65% = $383) - this is a total of $1,633 saved before the credit"
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https://ttlc.intuit.com/questions/3293193-dependent-care-expense-account-reported-in-box-10-as-depen...>
4) "Dependent Care FSAs are also sheltered from the 7.65% Social Security and Medicare tax."
<a rel="nofollow" target="_blank" href="
https://havenlife.com/blog/fsa-or-tax-credit-how-you-can-save-on-child-care/">https://havenlife.com/...>
5) "Most plan contributions are made directly through payroll deductions. Your total annual estimated dependent care costs are divided by the number of paychecks in a year and that amount is taken directly off the check. This reduces taxable income on every paycheck and spreads the benefit throughout the year. Federal and state taxes, as well as Medicare and Social Security deductions, are calculated on the income net of contributions"
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https://www.investopedia.com/articles/pf/12/fsa.asp">https://www.investopedia.com/articles/pf/12/fsa...>
Despite information mentioned above, I do think that if someone makes well above the $128,400 limit subject to Social Security tax, then having an FSA would not reduce or provide any shelter from the 6.2% Social Security Tax, because even with the FSA deduction, that person would have reached the $128,400 limit anyway. However, for the Medicare Tax, information above seems to suggest that amounts contributed to an FSA for dependent care WOULD NOT be subject to Medicare tax.
Thanks again for any clarification you can provide on this!