Take Advantage of a Flexible Spending Account
At this time of year, our mind starts to drift toward the T word. That’s right, taxes! I don’t know about you, but hubby and I look for the legal ways that we can give less of our money to the government. I know that is funny to say since I work for the government, but hey, it is true.
The best solution I have found so far is our Flexible Spending Account (FSA).
An FSA allows an employee to set aside a portion of his or her earnings to pay for qualified expenses in the plan, usually medical expenses but sometimes for dependent care . Money deducted from an employee’s pay into an FSA is deducted before payroll taxes, resulting in a substantial payroll tax savings.
My employer allows open enrollment in the FSA once per year. Of course, because I don’t have children, I do the FSA for my medical expenses. It is estimated that with a average salary an normal family saves around 30% in taxes.
Take Me For Example:
I contribute $83.33 per month to my FSA for a total of $1000 per year.
That $1000 is take out pre-tax. That results in approximately $300 in tax savings for me.
I pay for my yearly checkups at the doctor, dentist and optometrist with this money. It also allows me to pay for my prescriptions, contacts, over the counter medications, and even chiropractor appointments. I can also use this money for hubby as well.
FSA’s can also be set up for childcare expenses.
If you or your significant other has an FSA available to you, I highly recommend that you check it out! Always remember for this to be beneficial to you, you have to use the money! Don’t forget about it, or you will lose it!
Keep in mind I am not a tax advisor, nor do I claim to be one. Plans vary greatly from company to company as well.
Do you have a Thrifty idea? Did you save a ton of money this week? Do you have a Thrifty deal you want to share?
If so, please leave a comment or link up below!
Please leave a link back to Coupon Teacher so that we can all share ideas.
This is linked to Life as Mom.