Flexible Spending Accounts: What Qualifies?
With less than two months left in the year, it’s time to look at the balance remaining in your Flexible Spending Account (FSA)! These are the tax-advantaged accounts set up to pay for medical expenses. It’s important to use up all of the money in the account since it is a “use it or lose it” proposition. Leaving an unused balance in the account may wipe out much or all of the tax advantage of contributing to it in the first place.
Figuring out which medical expenses qualify can be the tricky part. A full list of what can and can’t be used for this account can be found in the IRS Publications 969 and 502. Here is an excerpt from a recent Wall Street Journal article showing a sampling of which expenses do and don’t qualify:
• Doctor copays
• Visits to urgent-care centers
• Prescription drugs
• Dental visits
• Hospital stays
• Ambulance rides
• Nutritional supplements
• Gym or health-club memberships
• Weight-loss programs (unless for a disease diagnosed by a physician, such as obesity or hypertension)
• Facial tissue
• Maternity clothes
• Teeth Whitening
• Hair transplant or removal
• Cough drops
If you have a FSA and have questions, please contact your Wealth Management team at Woodward Financial Advisors in Chapel Hill, NC. We’re here to answer your questions related to the FSA or any other financial planning issues.