Save on Taxes With A Flexible Spending Account (FSA)
If you have a health plan through a job, you can use a Flexible Spending Account (FSA) to pay for copayments, deductibles, some drugs, and other healthcare costs.
What is an FSA?
A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.
You don’t pay taxes on this money, but this means you’ll save an amount equal to the taxes you would have paid on the money you set aside.
Employers may make contributions to your FSA, but aren’t required to.
When is the deadline?
You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:
- It can provide a “grace period” of up to 2 ½ extra months to use the money in your FSA.
- It can allow you to carry over up to $550 per year to use in the following year.
Your employer can offer either one of these options but not both. It’s not required to offer either one.
At the end of the year or grace period, you lose any money left over in your FSA. That means it’s important to plan carefully and not put more money in your FSA than you think you’ll spend within a year on things like copayments, coinsurance, drugs, and other allowed health care costs.
Find out more at this link to the Healthcare.Gov site
LIST OF ELIGIBLE FSA DEPENDENT CARE EXPENSES
COVERED OR NOT
| Description | |
| Adult daycare center | Yes |
| After school program | Yes |
| Au pair | Yes |
| Au pair | Yes |
| Babysitting (work-related, in your home or someone else’s) | Yes |
| Babysitting by your relative who is not a tax dependent (work-related) | Yes |
| Before or after school program | Yes |
| Before or after school program | Yes |
| Child care | Yes |
| Child care | Yes |
| Custodial elder care (work-related) | Yes |
| Dependent or elder care (while you work, to enable you to work or look for work) | Yes |
| Elder care (in your home or someone else’s) | Yes |
| Extended care (supervised program before or after regular school hours) | Yes |
| Housekeeper who cares for child (only portion of payment attributable to work-related child care) | Yes |
| Nanny | Yes |
| Nursery school | Yes |
| Payroll taxes related to eligible care | Yes |
| Preschool | Yes |
| Preschool | Yes |
| Registration fees (required for eligible care, after actual services are received) | Yes |
| Senior day care | Yes |
| Senior day care | Yes |
| Sick child care | Yes |
| Summer day camp | Yes |
| Summer day camp | Yes |
| Total payments (transferred from previous administrator) | Yes |
| Transportation to and from eligible care (provided by your care provider) | Yes |