If you already have to spend on child care, healthcare and have are enrolled in a high deductible health plan, you may want to consider whether or not you want to save more money through your employer's benefits. Yes, you read correctly, you can save more money if you are strategic about enrolling into a Flexible Spending Account ("FSA") through your employer.
I'm a true believer that Just know, there is no such thing as bad money, except money that goes to waste. So if you don't want to to waste money by giving more money to Uncle Sam then you have to, keep reading.
For those who don't know the benefit of FSA, FSA allows you to set aside pre-tax money which helps you pay LESS federal taxes. You get your money back when you submit claims e eligible health care and day care expenses and use the reimbursement for anything; including more expenses, Christmas money or vacation money.
Under the law, there are three types of FSAs: A Dependent Care FSA, general purpose Health Care FSA, and a Limited Expense Health Care FSA. A Dependent Care FSA reimburses eligible day care expenses for your children under age 13 and your tax dependents of any age who are incapable of self-care, as well as elder care expenses. The only catch is that reimbursable expenses may be necessary to allow you and your spouse (if married) to work, look for work or attend school full-time. So you don’t even try to get reimbursement for weekend respite care.
A general purpose Health Care FSA (HCFSA) reimburses eligible health care expenses not covered by your employers health plan, dental or vision plan, such as co-payments, co-insurance, deductibles, over-the-counter medicines (with a prescription), medical supplies, prescription drugs, vision and dental care, shipping and handling charges for mail-order prescriptions and eligible over-the-counter items, and much more.
Lastly, A Limited Expense Health Care FSA (LEX HCFSA) is designed for individuals who are enrolled in or covered under a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA). Those who are enrolled in an HDHP must spend HIGH deductibles and group plan covers the remainder. And if you already must pay high deductibles, why not get a reimbursement for it? Just note, when you enroll in a LEX HCFSA and an HSA at the same time, a LEX HCFSA limits reimbursement to only eligible dental and vision expenses.
Hopefully this information will help someone make the right move so that they can have better outcomes with their income. Of course, accountants may know of other loopholes to save you from giving the IRS all of your coins.
Do you have any other suggestions to help individuals use their employer benefits for their benefit? If so, please leave a comment below and let me know. Additionally, please don’t forget to share this post with your friends because every should get a free legal treat every once in a while.
The Boss Builder, Toni Moore, Esquire, is an author, speaker, estate planning attorney and financial coach who is committed to helping women have better relationships with their money so they can live better lives. Twitter/Instagram: @thecoinboss
Toni Moore, Esq.
Toni is an attorney and business coach who is committed to helping women uplevel their success.
All Budget Business Career Goals Coach College Dreams Estate Plan Girls Inspiration Law Leadership Life Balance Mission-driven Money Motivation Oprah Winfrey Personal Finance Pursuing Dreams Rat Race Scholarship Spiritual Balance Strategy Success Wealth Women Women Business Women Empowerment