What is the amount of her tax savings

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Question - Patricia, an unmarried taxpayer who is head of household, has adjusted gross income of $42,800 and incurs $4,000 of child care expenses for part-time care of her 8 year old son, Joshua. Patricia can shelter up to $5,000 (or her expenses if less) in an employer provided childcare reimbursement program or take the Child and Dependent Care Credit. If Patricia elects to participate in the employer provided program and has her expenses deducted from her reported salary instead of using the Child and Dependent Care Credit, what is the amount of her tax savings from choosing this option? Assume the 2020 tax year.

Reference no: EM132964076

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