Tuesday, December 1, 2009

Don’t Forget Your Flex Account

A Flex Account (FSA) is an employment benefit that lets you set aside a portion of your earnings to pay for qualified expenses such as, medical or dependent care. You set the money aside and then don’t have to pay taxes on it.In the past I used this as a way to pay for childcare and braces for my kids. The setup is similar to an HSA.

The most important thing about your FSA is to NOT FORGET IT. If you don’t use the money, you’ll lose it. To prove that you used it you’ll need submit an expense form and receipts by a specified date. For some employers that day is the end of the year, December 31st.But the majority of employers have moved the deadline to March 15th.

You can apply your FSA to a variety of expenses like insurance co-payments and deductibles, eye care, childcare or adult dependent care, but not elective cosmetic procedures.Some plans specify that they can only be used for dependent care and not medical expenses, so be sure to check with your employer.

Some ideas for how to spend residual dollars are:
  • Eye exams
  • Dental work (but not tooth whitening)
  • Contact lenses and lens solution
  • First aid supplies for emergency kits
  • Lifetime care advance payments

If you are laid off the time period that you can claim FSA expenses is often reduced to the time during which you were employed. In other words, if you are layed-off in October, you can only submit expenses from January through October. You can not submit any expensed incurred after your layoff date.

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