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Client Services, Inc.
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Plan your contribution carefully
. The IRS requires
you to forfeit any unused dollars in your Section 125
Medical or Dependent Care Expense Accounts at the
end of the plan year. This is called “use it or lose it”.
You have 90 days after the end of the plan year to be
reimbursed for expenses you incurred in the previous
year.
Below is a partial list of eligible expenses that can be reim-
bursed from a Medical Reimbursement Account. Other out-of-
pocket expenses may qualify.
Alcoholism treatment
Laboratory fees
Artificial limbs
Licensed osteopaths
Ambulance
Licensed practical nurses
Braces
Orthodontia
Chiropractors
Orthopedic shoes
Coinsurance and copayments
Obstetrical expenses
Contact lens solution
Oxygen
Contraceptives
Prescription drugs
Crutches
Podiatrists
Deductible amounts
Prescribed vitamin
Dental expenses
Psychiatric care
Dentures
Psychologist expenses
Dermatologists
Routine physical
Diagnostic expenses
Seeing-eye dog expenses
Eyeglasses, including exam fee Smoking cessation programs
Handicapped care and support
Sterilization and reversals
Nutrition counseling
Substance abuse treatment
Hearing devices and batteries
Surgical expenses
Hospital bills
WITHOUT FSA
WITH FSA
$3,000
$3,000
$2,600
Federal Tax
$234
State Tax
$128
Social Security
$126
Medicare
$44
Total Taxes
$532
Federal Tax
$174
State Tax
$103
Social Security
$109
Medicare
$38
Total Taxes
$424
Taxable
Income
Taxable
Income
$2,176
$2,068
Gross Monthly Income*
Dependent Care
$300
Medical
$100
Pre-Tax
Deduction
$400
Dependent Care
$300
State Tax
$100
After-Tax
$400
Take
Home Pay
Take
Home Pay
Monthly Savings
$108
* This is an example and for illustration purposes only. Taxes are not exact and will vary.
How will a flexible spending arrangement
save you money?