Fun with FSAs [Flexible Spending Accounts]

September 29, 2019

by — Posted in FSA, Tax Advantaged Accounts

FSAs are pre-tax healthcare spending accounts. As of 2019, you can individually contribute up to $2700/yr into one. Since the money is withdrawn by your payroll provider before it is subject to either federal or (in most cases) state income tax, you can effectively get a ~30% discount on any covered service or qualified expense you incur.

The annoying thing about FSAs is the “use it or lose it” rule. You have to spend all the money you put in the FSA each year or your company is required to keep it! The horror. The IRS allows providers to offer a 2.5 month grace period to spend down the balance or a $500 rollover amount, so be sure to keep a watch on that.

I was looking over the FSA regulations and found several fun uses for FSA money. I hope these prove useful to you:

  • Purchase of a New Mattress
  • Purchase of a Treadmill
  • Shower Chairs
  • Importing Drugs from Canada
  • Personal Trainer Fees
  • Orthodontic Work
  • Lead-based Paint Removal
  • Health Club Fees
  • Carpet Removal
  • New Air Conditioner
  • New Air Purifier

To be fair, most of those uses require a “letter of medical necessity” to be covered. Talk to your doctor about how you want to spend your FSA money and get them to write you a letter. If your back hurts, maybe you need a new tax-free mattress to fix it!

Leave a Reply

Your email address will not be published. Required fields are marked *