As April 15 approaches, it's important to consider the benefits of your FSA. A recent article in USA Today stressed some of the tax breaks you could be enjoying and noted, "Even after April 15, make sure you're not missing out on other valuable tax breaks for the rest of 2015—namely, pre-tax contributions to an employer-sponsored retirement plan or flexible spending accounts for medical, child care and transit expenses. "That's money left on the table," Labant said."
Flexible Spending Accounts can cover a variety of expenses - ranging from healthcare products to medical services - and this is all on a pre-tax basis.
Do I submit additional paperwork when it comes to taxes (if I have an FSA)?
Money is taken out of your paychecks on a pre-tax basis every month, which reduces your taxable income. You don't have to do any additional paperwork come tax time. What you should always keep in mind is how much money is available in your FSA account throughout the year, so you can fully utilize the benefits of the plan.
Can I ever change how much I contribute to an FSA?
Employers provide an open enrollment period during which you can add or change your coverage options, including your FSA contributions. You can contribute up to $2,550 per year to an FSA. Once the FSA plan year has begun, changes to your FSA are typically only allowed if there is a qualifying event, which may include getting married, changing jobs, and certain other circumstances. Each FSA plan defines the circumstances in which you can change your contribution. Your FSA administrator can confirm these with you, and your Summary Plan Document outlines provisions of your FSA plan.
Again, the best way to use your FSA is to keep tabs on it during the plan year. Be sure to apply it for different out-of-pocket medical expenses ranging from medical care to healthcare products.
Check out FSAstore.com's FSA Eligibility List for a full list of eligible expenses like products and services.