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HEALTHCARE
FLEXIBLE SPENDING ACCOUNT
Up
to $5,000 per year maximum
This account enables
you to be reimbursed for out of pocket eligible health care
expenses incurred by you and your dependents that are not
covered by medical, dental or vision plans. You must
submit an itemized bill, fill out a form and then you’ll
be reimbursed at least once a month (usually within two weeks)
of submittal. Examples of eligible expenses include
copays and deductibles for doctor visits, prescriptions, prescription
eyeglasses and contacts, laser correction surgery, contact
lens solution, dental care, hearing aids, laboratory fees
and psychologist and chiropractic visits. If you are
considering budgeting for an expenseive procedure like LASIK,
major dental work or orthodontia, it is recommended to have
an evaluation and receive your cost estimates before you set
the money aside. Common ineligible expenses include
premiums for other health plans, cosmetic procedures, and
fitness programs. Due to changes in federal law, over
the counter medications will no longer be eligible expenses.
Below
is an example for a single employee with zero exemptions earning
$60,000 per year who saved approximately $419.50 in taxes
by creating a $1,000 healthcare flexible spending account.
| Employee Tax Savings |
Without FSA |
With FSA |
| |
|
|
| Total Gross Annual Wages |
$60,000.00 |
$60,000.00 |
| Health Care FSA Expenses |
--- |
$1,000.00 |
| Dependent Care FSA Expenses |
--- |
--- |
| Taxable Annual Wages |
$60,000.00 |
$59,000.00 |
| |
|
|
| Income Taxes |
|
|
| Social Security & Medicare |
$4,590.00 |
$4,513.50 |
| Federal Income Taxes |
$9,615.00 |
$9,365.00 |
| Dependent Care Credit |
--- |
--- |
| Earned Income Credit |
|
|
| State Income Taxes |
$3,224.83 |
$3,131.83 |
| Total Taxes |
$17,429.83 |
$17,010.33 |
| |
|
|
| Health Care Expenses |
$1,000.00 |
--- |
| Dependent Care Expenses |
--- |
--- |
| After Tax Income |
$41,570.17 |
$41,989.67 |
| Annual Tax Savings |
--- |
$419.50 |
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