Profitt Report: Here are creative ways you can use your FSA dollars
A flexible spending account is a great way to save money but if you have one, check your employer handbook. In many cases, you must use the cash by the end of the year, or you lose it.
A FSA, or flexible spending account, is an employer-sponsored plan, designed to save money on medical expenses. You decide how much goes into the account (though there is a maximum amount allowed by the IRS), it isn’t taxed and you can use it on qualifying medical expenses.
Ben Clevenger works with Michigan Planners and he said the IRS rules recently changed.
“The IRS has loosened up some of those restrictions and you can roll over $500 if your employer has elected,” he said.
Or the other option: your employer could’ve elected to have a grace period, meaning you can spend your FSA dollars until mid-March.
“You can't have both, it's either/or,” Clevenger said.
Either way, the clock is ticking. You can use this money for traditional medical expenses such as copays, deductibles, prescription medications and over-the counter medication, as long as you have a doctor’s prescription.
“That's the other easy, low hanging fruit, what’s in your cabinet that needs to be replenished? Band aids are covered by the IRS as an eligible expense. If you’re going on vacation for Christmas or spring break, you can get sunscreen covered by the spending account as long as it's 30 SPF or higher,” Clevenger said.
There’s even a store where you can buy FSA approved items.
“They will make it very easy for you to stay in the comfort of your home and shop around for acupuncture pillows, thermal blankets,” he said.
Even massaging gel shoe inserts, ice packs and pregnancy tests are FSA approved.
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