All About Flexible Spending Accounts
BOSTON (CBS) - I know you are thinking about Christmas or Hanukkah right now but we should think about year-end tax planning as well.
If you are willing to spend some time, I can guarantee you some savings when you file your taxes next year.
We'll start with the Flexible Spending Accounts (FSAs), sometimes called cafeteria plans or section 125 plans. This is a benefit offered by many employers whereby you set aside part of your income pre-tax to these accounts to use for medical or childcare expenses.
The maximum contribution this year for medical is $2,550 for medical expenses. Employer plans do vary.
If your employer offers a Flexible Spending Account you must re-enroll each year and open enrollment for 2016 ends this Friday, December 4th.
Currently you will lose any money remaining in your account at the end of the plan year, but, depending on your plan, you may have until March 15 of next year to spend it. Also your employer can now allow you to use up to $500 left in the healthcare account to be used towards next year.
There are some things you can do right now to use some of the dollars in your account:
- Schedule your annual checkup if it is not covered by your health insurance plan.
- Pre-pay the kid's orthodontist.
- Get your teeth cleaned, get the kids to the dentist over school vacation as well.
- Pre-pay your dentist if you are having dental work such as implants or crowns.
- Get an eye exam, an extra pair of glasses or prescription sunglasses.
- Weight loss programs – here you need a note from your doctor that you need to lose weight to treat a specific medical problem such as diabetes or high blood pressure, pre-pay the membership fees.
- Want to quit smoking – same route get a doctor's note and pre-pay the program fees.
- Keep track of your mileage to and from your health care provider.
- Schedule elective surgeries such as Lasik which is normally not covered by insurance.
