If you have a Flexible Spending Account (FSA), remember to consider how it can benefit you when it comes to Queen Creek eye care. But first, it’s important to have a good understanding of exactly what a FSA is and how it works.
What is a Flexible Spending Account?
Your FSA is generally included as part of your health care benefits package. It allows you to automatically set aside a portion of your paycheck in a special account that allows you to pay for health care expenses with pre-tax dollars.
How to save money on Queen Creek eye care with an FSA
The potential savings are best illustrated with an example. Say you have to pay 22% of your salary towards income taxes (federal and employment taxes, etc.). And say you’ll be spending $1000 on eye care expenses that aren’t covered by insurance or other sources.
If you pay for that eye care out of your regular bank account, it would be paid for with pre-tax dollars.
You’d first have to earn $1283, then pay 22% of that as income taxes, and be left with about $1000 to spend on eye care.
But, if you use your FSA to pay for that expense, you’d only have to earn $1000 to get $1000 worth of eye care. That’s a savings of $283!
Obviously the exact amount that you’ll save will depend on what income tax bracket you’re in. But as you can see, your FSA is well worth using.
Where does “use it or lose it” fit in?
In most cases, if you don’t use the money that you’ve put into your Flexible Savings Account within a year, you’ll lose it. Because of this, it’s very important that you base your contribution amount on how much you think you’ll actually use.
Another thing you need to know is that the IRS puts a limit on how much you can contribute. This is updated on a yearly basis, and you should start looking for their announcement on the matter in October or November of each year.
Worst case, if you miscalculate and contribute more than you need, check to see if your plan allows for a carryover or grace period. An important point to know is that plans are allowed to offer one or the other, but not both.
Finally, your employer is not allowed to refund any unused money left in your FSA at the end of the plan year.
Every plan is different, so check with your health insurance to see exactly what’s covered by yours. However, there are some common eye care items that usually qualify:
- eye glasses and contact lenses required for medical reasons
- eye exams
Use your Flexible Spending Account for your Queen Creek eye care needs
There’s no sense in paying for eye care with pre-tax dollars if you don’t have to. Save money and use your FSA instead! That’s what it’s there for, after all.