Planning For Your FSA Spending

Charlie Marlow — Wed, 18 Dec 2024 18:20:15 +0000

Using your Flexible Spending Account is a great way to save 18 to 40 percent (depending on your tax bracket) on eligible expenses because you’re using pre-tax money to pay for the cost. FSA contributions are withheld from your paycheck and held until you have paid an eligible expense and reimbursed. It’s important to accurately estimate your anticipated expenses because FSAs are annual accounts that, with few exceptions, must be spent during the calendar year or forfeited.

There are two types of FSA accounts; one for medical expenses and one for dependent care expenses. Let’s explore some eligible expenses for each type:

Medical: Doctor visits, prescription medications, dental care, vision care, orthodontia, and certain over-the-counter items are eligible. You can contribute up to $3,300 to your medical FSA, but estimate carefully, as only $660.00 can be carried over into the next calendar year. Estimate your expenses and savings with the Limited FSA Savings Calculator – FSAFEDS.
Dependent Care: Child and adult day care, before and after-school care, and summer day camp expenses are all eligible. The maximum contribution is $5,000 for the year. Unlike the medical FSA, there is no carry-over allowed into the next year, but there is a grace period of two and a half months that you can incur expenses and use the funds as long as you file for reimbursement by 30 April. The Dependent Care FSA Savings Calculator – FSAFEDS can help you determine how much you can contribute and see your tax savings.

Still have questions? Check out the FSAFEDS website!

Find Out More with My Military Savings and Finance!

Heath Care FSA – Our Military Life Blog

Planning For Your FSA Spending