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You may know that the IRS offers a tax deduction for medical expenses. On the other hand, you may not have known that. The reason this part of the tax code goes widely unused and therefore is not popularly known is that in order to achieve this deduction you have to spend in excess of 7.5% of your adjusted gross income (AGI) on medical expenses. Even then, only the portion that exceeds the 7.5% threshold is allowed as a deduction.
To put that into some understandable perspective, imagine you and your spouse are filing a joint return and you have a combined household adjusted gross income of $75,000. In order to qualify for the medical expense deduction under normal circumstances, you’d need to have spent in excess of $5,625 in medical expenses throughout the year. Now let’s say you made that hurdle and spent $6,000 on medical costs throughout the year. You’d still only be able to claim a deduction of $375. Not such a great benefit for a year in which your medical expenses were rather large; you received a deduction of half a percent of your AGI.
But the good news is that there is a way to ensure that you can reap the reward of this deduction without spending 7.5% of your AGI on medical expenses. Flexible Spending Accounts, often abbreviated as FSAs, allow you to put pre-tax money aside in an account which you will spend on medical expenses. Many plans require you to save all receipts and file claims for reimbursement. However, in recent years some of these plans have taken to issuing debit cards by which you can draw against your account when you pay for your doctors’ bills or prescriptions.
Another benefit here is that everything you spend with the FSA is deductible, not just the amount above a percentage of AGI. FSAs are offered through many employee benefits packages. Ask your Human Resources or benefits department if this is among the benefits offered to you as an employee.
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Will a flexible spending accounts help build credit?
No
What is the name for reimbursement accounts for qualified medical and childcare expenses?
What is the name for reimbursement accounts for qualified medical and child care expenses? A. cafeteria plans. B. deferred compensation plans. C. option plans. D. flexible spending accounts. d
What banks offer flexible spending accounts?
Flexible spending account is one of the benefits offered by US Bank catering for one's healthcare payment. It is one way of reaping tax savings and helping individuals come up with smarter decisions to stay healthy.
What are ADP's benefit services?
The ADP provides benefits for companies that include health and welfare solutions, flexible spending accounts, retirement services, and compensation services.
Can a couple have two separate flexible spending accounts from two different employers?
Yes. Just like insurance tough you just can't get paid 2x for the same expense. (Once it is paid the first time, you have no expense really for the 2nd). Yes, you can have two separate flexible spending accounts from two different employers. However, the total amount that is put into both plans combined is limited by the IRS. For example, the maximum that a couple can put into a dependant care flexible spending account in 2007 is $5,000. If you and your spouse contribute more than that, you would lose the amount over $5,000. It would not be legal to submit the same expense to two different flexible spending account plans.
Must an employer offer Flexible spending account?
No, employers are not required to offer a Flexible Spending Account (FSA) to their employees. However, offering an FSA is a benefit that some employers choose to provide to help employees set aside pre-tax dollars for certain eligible expenses like medical or dependent care.
Can you have an Flexible spending account if you are on Medicare?
yes
Are flexible daycare spending accounts good?
The advantage of a flexible daycare account is that the money is tax free. While you might be able to deduct some, most or even all of the money at the end of the year when you file your taxes, this gives you the advantage of not having to mess with the tax calculation. Also, there are often minimums and maximums for spending that must be met before you can deduct them.
Do you owe taxes on unused flexible spending dollars?
no
Benefits of the KFC?
KFC offers a lot of benefits to their workers. Medical, dental, flexible spending accounts, supplemental vision, 401(K), profit sharing, and financial planning are available to employees of KFC.
Is the cost of my spouse's insurance premium reimbursable through my flexible spending account?
Yeah, the cost simply reimbursable through your flexible spending account. I guess that that's just reality
Where does one learn more about the benefits of having a flexible spending account?
You can find out about the benefits of having a flexible spending account anywhere on the Internet. You can get good information on FinancialPlan. They tell you all the things about saving and budgeting.
