Now is the time to address your health care flexible spending account (FSA) for a couple of reasons. You don’t want to wind up losing money or affecting your health.
What is a flexible spending account (FSA)?
A flexible spending account (FSA) is a financial account that has great tax benefits. Set up through your employer, the account offers a way to set aside a portion of your income, tax free. This money can be used throughout the coming year to pay for health related expenses that you might incur. It is a great way to pay for medical expenses without having to that income taxed.
After deciding on an amount of money to be set aside, you are given a card. This card can be used just as you would use a regular debit card. If the money placed in this account is not used by the end of the period (usually the calendar year) it is forfeited.
Now is the time to look at your flexible spending account for a number of reasons.
Open Enrollment
Most companies hold open enrollment for FSAs. This is when you sign up and declare the amount that you want set aside.
Changes to rules
Starting next year, there is a limit to what can be purchased with the account. This year, over the counter items, such as pain relievers and bandages are included. Next year, that won’t be the case. Keep this in mind when decided on how much to contribute to the account.
Left over funds
Since most account terms are over at the end of the year, you’ll want to find out how much money is left in your account now and use it up before it is forfeited. So, now is the time to order your contact lenses, schedule your dentist appointement or stock up on cold and flu supplies.
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