Flexible spending accounts (FSAs) can lower your income tax burden and help keep more money in your pocket each pay period. The pre-tax dollars you contribute — up to $2,600 a year for 2017— allows you to pay for certain out-of-pocket health care expenses. Because you’re using pre-tax dollars, you’re not paying taxes on this money.
But you should know that if you don’t use all the funds in your account, you could lose them. See if your employer offers a grace period. That’ll give you an extra two months and 15 days after your plan year ends to use FSA money.
Also ask about a carry-over option, which allows you to carry over $500 from one plan year to another. Employers can offer one option or the other, but are not required to offer either option. So, keep track of your balance. You don’t want to leave FSA money on the table. If now’s the time to exhaust your funds here are some ideas.
Weight loss program
If you and your doctor have talked about weight loss as a medical necessity, your FSA funds could be used to pay for a program. Consider less expensive options like meal replacement programs or a more comprehensive hospital-managed weight loss plan.
See about vision care
Buy contact cases or solution. You can also invest in a new pair of glasses or prescription sunglasses. If you’ve got enough left over, you can even apply it to Lasik surgery.
Take care of pearly whites
Apply money to an extra cleaning or special procedure. If you have dentures, the money could be used for a new set
Get rid of aches and pains
Physical fitness can be hard on the body. Get tuned up with a visit to an acupuncturist or chiropractor.
Use your FSA funds for your prescriptions, and doctor’s, dental and eye care visits. You can’t spend FSA funds on insurance premiums.
Update your first aid kits
If you have a fully stocked first aid kit at home and in your car, buy a few extra supplies and donate them to disaster recovery initiatives or a local non-profit in need.
Plan for next year
If you’ve allotted too much this year, review your current elections and determine the right amount for next year. Check with your Human Resources department for a full list of spending options.
Article provided by Local Government Federal Credit Union.
The advice provided is for information purposes only. Consult your human resources representative for additional guidance.