How Do You Save Money for the Holidays?

holiday moneyIf you are not utilizing an FSA, maybe you should be.

A Flexible Spending Account can help you save hundreds of tax dollars each year; with an FSA you end up with a tax deduction for your out-of-pocket medical and/or dependent care expenses.

Doing some simple planning of the expenses you will incur in the next year, can save you approximately 28% on your insurance co-pays and deductibles, prescription drugs, diabetic supplies, eye glasses, podiatry services, dental services, orthodontics/braces, and more. And let’s not forget 28% on dependent day-care expenses for your young children up to age 13. To give you a clearer picture of the savings, take a look at the bottom line of how much more money you can have in your pocket each month according to the example (*figures will depend on employees actual earnings, tax rates, and costs):

  NO FSA Plan FSA Plan
Monthly Income $ 3,500.00  $ 3,500.00
Pretax Medical Expenses  –  $ 100.00
Pretax Daycare Expenses  –  $ 400.00
Pretax Premiums (health & dental) $ 75.00     $ 75.00
Taxable Income $ 3,425.00  $ 2,925.00
Withholding (28% for taxes, FICA, Medicare) $ 959.00  $ 819.00
Post-tax Medical Expenses $ 100.00  –
Post-tax Daycare Expenses $ 400.00  –
Net Income $ 1,966.00  $ 2,106.00

That’s an additional $140 per month, or $1680 per year!

Contact your benefits representative today to find out more about utilizing an FSA, in order to save money!

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About HR Strategies

HR Strategies is a private human resource management firm created to enable small business owners to focus on their core competencies, rather than the tedium of running payroll, providing employee benefits, or the many other facets of human resource administration. We allow business owners to concentrate on their passion, without being distracted by countless human resource responsibilities.

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