Reduce your income taxes while putting aside money for health and dependent care needs.
Flexible Spending Accounts (FSAs) allow you to put aside money for important expenses and help you reduce your income taxes at the same time. [CLIENT] offers [two/three] types of accounts – a [Health Care FSA, a Limited Purpose FSA, and a Dependent Care FSA].
How Flexible Spending Accounts Work
- Each year during Open Enrollment, you decide how much to set aside for FSA expenses. Your full contribution amount will be available for use on your benefit effective date.
- Your contributions are then deducted from your paycheck on a pre-tax basis in equal installments throughout the calendar year for use on qualified expenses.
- You can use your FSA debit card to pay for eligible expenses at the point of sale, or you can pay out-of-pocket and submit a claim form for reimbursement.
USE IT OR LOSE IT!
Be sure to calculate your FSA contributions carefully. The funds won’t roll over from year-to-year, and you will have to actively re-enroll on a yearly basis. You are not automatically re-enrolled. [Adjust if there is a HCFSA $570 carryover or grace period].
|
|
Annual Maximum Contribution |
|---|---|
Health Care or Limited Purpose Flexible Spending Accounts |
[$2,850] |
Dependent Care Flexible Spending Account |
[$5,000] ($2,500 if married and filing separate tax returns) |
Please note that these accounts are separate. You cannot use money from the Health Care FSA to cover expenses eligible under the Dependent Care FSA or vice versa.
*If you are enrolled in a medical plan that offers an HSA, you are not eligible for the Health Care FSA.
