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Flexible Savings Account Changes Coming in 2011
Nov 19, 2010 (11:11 AM EST)
ST. LOUIS, Nov. 19, 2010 /PRNewswire/ -- Personal Finance Blog ChristianPF.com published an article discussing the changes coming in 2011 to Flexible Savings Accounts. With a Flexible Savings Account you can deduct pre-tax dollars out of your salary to pay qualified medical expenses. You can designate an FSA for your own healthcare expenses or for those of a dependent. But most FSAs are "use it or lose it" - at the end of the plan year, the money left in the account doesn't roll over into the next year.
An excerpt from the article...
The benefit of the FSA is that money typically comes out of your paycheck pre-tax, meaning before federal and state income taxes. This allows you to lower your gross income for the year and pay for medical expenses before you pay taxes, thus allowing you to avoid taxes on a portion of your income. Keep in mind there are many rules and regulations to follow in order to take advantage of an FSA.
Not all companies allow FSAs so you will have to check with your employer to see if one is available to you. Currently, there is no IRS limit on how much you can direct to your FSA account, but your employer will impose a limit. You may be tempted to put as much as you can into this plan, but be cautious: any amount you do not spend when the plan closes out, is gone forever! In other words, "use it or lose it!"
Read the full article: http://christianpf.com/flexible-savings-accounts-fsa-changes-for-2011/