Before you head to the beach, use this tax-advantaged account to stock up on summer necessities.
Flexible spending accounts allow workers to sock away cash on a pretax basis into a savings account. You can take tax-free distributions from your FSA as long as the money goes toward qualified medical expenses.
Last year, about 3 out of 4 large employers offered their workers a medical FSA to help offset health care costs, according to the Kaiser Family Foundation.
This year, you can save up to $2,700 in your FSA.
There’s a catch: Generally, if you contributed money in 2019, you have until the end of the calendar year to use it.
The IRS allows companies the option of permitting workers to roll over up to $500 into the following year or giving them until March 15 of the new year to spend down the account.
Don’t forget that the health care FSA is different from health savings accounts.
The so-called HSA works alongside high-deductible health insurance plans, and you can tap that account tax-free for qualified medical expenses.
Money you accumulate in an HSA can be rolled over from one year to the next.
This year, don’t wait until the last minute to use up your funds. You can get plenty of use out of your FSA right now with these summer purchases, according to WageWorks.
Stock up on sunblock and lip balm. If they have a sun protection factor rating of at least 15, both products are FSA-eligible, according to WageWorks.
Missed a spot while applying your sunscreen? Ointments and creams to treat sunburns are also eligible purchases.
Your prescription optical lenses and contacts aren’t the only eyewear that’s considered a qualified medical expense. Prescription sunglasses are also FSA eligible.
No, you can’t tap your FSA for a cruise to the Caribbean. However, you can use the account to cover transportation and parking if you’re traveling to receive qualified medical care.
Bandages and wound care
Adventures outdoors can lead to road rash and other mishaps. Tap your FSA for bandages, ointments and other wound care items.
Weight loss programs
If your doctor recommends you lose a few pounds – and she writes you a letter indicating that this is medically necessary to treat a specific disease – you might be able to use your FSA funds to foot the bill for some of the expenses.
Be warned: If you’re only going to the gym to whip yourself into shape, you won’t be able to use your FSA money to pay for those costs.
If the great outdoors are getting to your sinuses, consider using your FSA to treat your allergies. You’ll need a prescription from your doctor or a letter of medical necessity to snap up those allergy treatments, according to WageWorks.
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