How Do You Save Money for the Holidays?
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!