Flexible Spending Accounts (FSAs)
USE IT OR LOSE IT!
These accounts are “use it or lose it”, which means any funds remaining at the end of the plan year are lost. Spectrum Brands added a 2.5 month grace period to the plans, which means you can incur expenses through March 15 of the next year, that can be used towards your current FSA election. All claims must be submitted no later than March 31.
How Much Could You Save?
Here’s an example. Let’s say Tom decides to set aside $2,000 in an FSA for the year. Normally, on that money, he’d pay $560 in federal income tax, $100 in state income tax, and $153 in FICA tax. So, by contributing that $2,000 to his FSA, he’ll get an $813 tax savings for the year.
Healthcare FSA
Contribute up to $3,400 per year, pretax, to pay for copays, prescription expenses, lab exams and tests, contact lenses and eyeglasses.
Limited Purpose FSA
Those enrolled in the HDHP can contribute up to $3,400 per year, pretax, to pay for eligible vision and dental expenses.
Dependent Care FSA
Contribute up to $7,500 per year ($3,750 if married and filing separate tax returns), pretax, to pay for daycare expenses associated with caring for elder or child dependents that are necessary for you or your spouse to work or attend school full-time. You cannot use your Healthcare FSA to pay for Dependent Care expenses.
Without the FSA, Tom Would Pay
- 28% in federal income tax: $560 savings
- 5% in state income tax: $100 savings
- 7.65% in Federal Insurance Contributions Act (FICA) tax: $153 savings
His total tax savings for the year with an FSA: $813
Health Care FSA: $100 minimum | $3,300 maximum
Limited Purpose FSA: $100 minimum | $3,300 maximum
Dependent Care FSA: $100 Minimum | $7,500 Maximum