Flexible Spending Account Reminder
FSAs are a great way to save money by paying for certain health care and dependent care expenses tax-free. You may contribute to a Health Care FSA, a Dependent Care FSA, or both. The money you contribute is taken from your pay before taxes are deducted — this lowers your taxable income, which means lower taxes for you!
You must re-enroll if you want to contribute payroll deductions to an FSA in 2016. Your current payroll deduction elections will not automatically roll over. However, if you are currently enrolled in a Health Care FSA, up to $500 of unused 2015 FSA dollars will roll over automatically into a Health Care FSA for 2016. These rollover funds do not count toward the annual contribution limits.
You can contribute up to $2,550 annually to your Health Care FSA. Eligible expenses include:
- Copays, deductibles, and coinsurance
- Smoking-cessation programs
- Vision care or services not covered by your plan, including contact lens solution and LASIK surgery
- Hearing exams and hearing aids
- Certain over-the-counter medications as prescribed by a physician
For the Dependent Care FSA, you generally can contribute up to $5,000 per married couple each year (up to $2,500 per year if you and your spouse file separate tax returns). Eligible expenses include:
- Babysitters (provided they’re not your child under age 19 or someone you claim as a dependent on your tax return)
- Care at licensed nursery schools, day camps and day care centers
- Household services for the care of an elderly or disabled adult who lives with you
To find a complete list of eligible FSA expenses, please visit the IRS Web site at http://www.irs.gov. Publication 502 lists all eligible Health Care FSA expenses, and Publication 503 lists all eligible Dependent Care FSA expenses.