If you have a FSA (Flexible Spending Account) through your employer, time may be running out to use the funds you deposited in there. Don’t be among the employees that miss or forget the deadline to use the funds and end up forfeiting a collective $400+ million each year. (source) HealthCare.gov defines an FSA as “a special account you put money into that you use to pay for certain out-of-pocket health care costs… You don’t pay taxes on this money. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.” When you set up a flexible spending account, it is through an arrangement with your employer where you deposit money from each paycheck into it; employers may make contributions as well, but are not required to.
The FSA account is generally set up by employers where you can use the funds for certain types of medical expenses not covered by your health insurance. Allowed expenses may vary, but can include health related expenses such as insurance copayments, deductibles, over the counter medications, and medical devices including hearing aids. As a bonus, the income set aside in your FSA is tax free. The downside is that you have to use the funds in the FSA account or you can potentially lose a portion or all of it. What’s worse than losing money? Don’t live with hearing loss when you could be using the money in your account to purchase them before time runs out.
Now there is a grace period that can allow you extra time to use the money in your FSA account or you can opt to defer up to $500 and roll it over to the next year. Of course, you should check with your employer or your tax specialist for specific details on your FSA account. Hopefully our friendly reminder helps ensure that you make the most of your health spending this year.
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