What amount should Lucia report for dependent care benefits on her tax form?

When determining the amount Lucia should report for dependent care benefits on her tax form, it's important to consider the allowable limits set by the Internal Revenue Service (IRS) for dependent care expenses. The IRS permits taxpayers to exclude from gross income the amount of dependent care benefits they receive from their employer, capped based on the number of qualifying dependents.

For a single individual or a married couple filing jointly, the maximum amount of dependent care benefits that can be excluded from taxable income is typically capped at $5,000 per year, provided the taxpayer has at least one qualifying child or dependent. However, specifically for reporting amounts on a tax form, each individual’s situation will determine how much they can actually claim.

In Lucia's case, the provided correct choice reflects the dollars she may have spent or received in benefits that fall within IRS guidelines for dependent care, taking into account her unique family circumstances, such as the age of the child and whether other deductions or credits may also apply.

In this context, reporting the amount of $2,000 falls within the acceptable range and likely aligns with the costs of care incurred during the tax year for children under 13 or other eligible dependents, making it a reasonable and justifiable figure for her tax return in line with