Quote:
Originally Posted by justin
Anyone want to venture a guess as to whether the FSA administrator will provide the IRS with the name and SS number I give them for my MIL along with the dollar amount reported as payments to her?
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I But this is more complication than I want to deal with for the potential tax savings of $1000.
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Been there, Brother
1. Actually, YOU will report on YOUR return MIL's SSN and amount paid to her for dependent care expenses, so the FSA admin is not involved for that part
2. If ya wanna blow off potential tax savings of $1,000.00, you could just pay MIL an add'l $1000 and it will more than offset her tax liability on the income.
What maybe more practical is to compromise between the tax savings to you and tax liability to her. You could pay family rate for her services and gift a portion of her tax liability if she reports the income.
When I say "been there" its because I had similar arrangement with SIL, EXCEPT she did not give us the "family rate". I was not a happy camper, but she needed the income, so I held my tongue. I did let her know I was required to report the expense and her TIN, so it was up to her to check with a tax advisor.