10/19/2022
Did you enroll in your FSA plan this year during open enrollment at work, if it's offered? If not, consider participating in this pre-tax benefit.
Typically, the only time you can deduct medical expenses on your tax return is if all your medical expenses exceed 7.5% of your adjusted gross income and even THEN, only the amount that exceeds that is deductible. So, if your AGI is 100,000 (from my lips to God's ears) you will have to first meet the threshold of having at least, 7,500 in deductible medical expenses. Then anything in excess of that is what is deductible.
In 2023 the maximum contribution to an FSA account is $3,050.
With an FSA account, there is a deduction that comes out of your check PRE-TAX. This means without the FSA deduction if you make 100.00 you are taxed on 100.00. But If you have 20.00 taken out of your check for your FSA account you are only taxed on 80.00 (100.00 - 20.00 = 80.00). Whatever amount you choose to elect, divide that by the number of pays in the year and that will be the payroll deduction amount for each pay.
But wait, there's more...
When you use your FSA funds to pay for your medical expenses that are NOT COVERED through your medical, dental & vision plans (including co-pays and coinsurance and much much more) you get the tax benefit immediately. You do not have to meet that 7.5% to use it. You can use it for the 1st dollar!
Here is a link to a simplified list of things you can use your FSA account to pay for https://turbotax.intuit.com/tax-tips/health-care/medical-expenses-checklist/L6MkxxlyW I think you'll be shocked at what things are eligible for reimbursement from the FSA account. Also, here is the IRS link that gives more details https://www.irs.gov/forms-pubs/about-publication-502 then click on "current revision publication 502" and it will give you all the info you need (the list starts on page 5 of the publication).
The caveat to the FSA plan is that it is "use it or lose it" because you get the upfront tax benefits so plan carefully. In 2023 you can carry over up to 610.00 to the following year. When planning how much you should take into consideration any medical expenses (don't forget to look at the list) you may have in the upcoming year and what you have paid out of pocket in the past and use that as your guide.
Wait, did I hear you say "but what about an HSA?" well, that's a whole other subject... stay tuned.
And BTW do not EVEN think about judging grammar and structure on my posts, it's a lost cause.
Cindi Ewancio Krempel
Information about Publication 502, Medical and Dental Expenses, including recent updates and related forms. Publication 502 explains the itemized deduction for medical/dental expenses claimed on Schedule A (Form 1040), and the health coverage tax credit claimed on Form 8885.
