Exercise 13-18 (Algorithmic) (LO. 4, 8) Ava and her husband, Leo, file a joint return and are in the 24% tax bracket in 2020. Ava's employer offers a child and dependent care reimbursement plan that allows up to $5,500 of qualifying expenses to be reimbursed in exchange for a $5,500 reduction in the employee's salary (Ava's salary is $120,500). Because Ava and Leo have two minor children requiring child care that costs $6,050 each year, Ava is wondering if she should sign up for the program instead of taking advantage of the credit for child and dependent care expenses. Analyze the effect of the two alternatives. Assume a FICA tax rate of 7.65%. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Click to view Percentage Credit based on Adjusted Gross Income. a. If Ava and Leo take advantage of the plan, they would save income taxes because the reimbursement of child care expenses is excluded from gross income. The income tax savings associated with participating in the plan would be $ 1,320 In addition, Ava will save $ 421 of FICA taxes due to the reduction in salary. Alternatively, if Ava does not take advantage of the plan, their child and dependent care tax credit will be $ X. Therefore Ava and Leo's income taxes will be $ higher if they do not participate in the plan