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Although these plans are offered to an employee, eligible dependent expenses can be included too.
Flexible Spending Medical Account
It’s not what you earn, it’s what you keep that counts!
Flexible Spending Accounts let you set aside a portion of your paycheck tax free to pay for certain health and dependent care expenses. Contributions are deducted from your paycheck prior to federal, state and social security taxes. No tax on your contribution saves you money (see chart below).
Are you and your family currently spending more than $300 per year in out-of-pocket expenses such as:
§ prescription copays and medicine
§ doctor visit copays
§ dental work - orthodontia
§ eyeglasses/contacts/laser eye surgery
§ chiropractic or acupuncture
§ over-the-counter medicines (effective 1/1/2011 no longer an eligible FSA expense because of Health Care Reform)
Is it impossible to reach the 7 ½ % of your adjusted gross income as a medical tax deduction?
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If you answered ‘yes’ to any of these questions you should be participating in a Flexible Spending Account.
An example of tax rates and estimated savings below, check with your tax advisor for more specifics:
Flexible Spending Account
Annual Employee Contribution
Tax Savings Single
Tax Savings Married
State (MA listed)