Talk:Flexible spending account/Archives/2013

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when has been the FSA created?

Can one use Standard deduction or Itemized deduction while using FSA ?

Yes, you can claim the standard deduction or itemize your deductions while participating in an FSA. But you cannot include expenses claimed under an FSA as part of your itemized deductions. And I think using a dependent care FSA prevents you from claiming the child care tax credit as well. Quacks Like a Duck 21:35, 26 October 2006 (UTC)

does the vendor care how much I put down?

will the vendor be adversely affected if I put down more than the receipt for childcare reads? there's a little disagreement here: why would he not give me a receipt for a few hundred dollars more than the receipt reads if I claim the amount is more? Will he have have to pay more tax? Will the benefits dept or the IRS figure out if I put down what I consider the correct number but the vendor has put down a different number? what a pain...

broken external link

http://en.wikipedia.org/wiki/Flexible_spending_account#External_links Health Savings Accounts vs. Health Reimbursement Accounts vs. Medical Savings Accounts vs. Flexible Spending Accounts - very helpful PDF chart comparing these, but has not been updated since 2005

Is there a new link or document with this type of comparision?Theflavor 19:15, 15 October 2007 (UTC)

Who regulates FSAs?

If there is a suspected or potential illegal activity, what regulatory agency can be contacted? Are FSA's regulated by individual states or the federal government? For example, at the time of reimbursement, is it legal for an FSA company to round down cents (see salami slicing in Wikipedia)? —Preceding unsigned comment added by Miguelmlc (talk • contribs) 19:05, 13 February 2009 (UTC)

The IRS regulates FSAs. ~ Quacks Like a Duck (talk) 20:20, 9 November 2009 (UTC)

Phase out at high AGI ?

are there any income based limits or phaseouts on the FSA ? in general, a great article. cinnamon colbert 5 apr 09 —Preceding unsigned comment added by 75.67.134.245 (talk) 16:36, 4 April 2009 (UTC)

Pension Funds

Can pension funds offer Medical Savings Accounts to there members? —Preceding unsigned comment added by 65.24.225.215 (talk) 14:51, 16 May 2009 (UTC)

Reference to Internal Revenue Code

I think it would be helpful if this article provided a reference to the appropriate section of the Internal Revenue Code governing Flexible Spending Accounts. Most of these are sold by 3rd party companies and some of them have tax implications, yet it is incredibly difficult to find information about the legal details. Providing appropriate references to the IRC would rectify this. --InsufficientData (talk) 21:10, 14 October 2009 (UTC)

It's section 125, I think. Cafeteria spending plans. --InsufficientData (talk) 12:02, 30 October 2009 (UTC)

Medical expense flexible spending accounts: IRC Section 125. Dependent care flexible spending accounts: IRC Section 129. Also, IRS Publication 969 discusses FSAs. ~ Quacks Like a Duck (talk) 20:20, 9 November 2009 (UTC)

In Store Use

I work in a regional grocery store, some tags on some of our health care items now say they can be bought with an FSA card, What are the laws regarding using one in this manner? 69.40.13.35 (talk) 22:12, 12 January 2010 (UTC)neal mc.

FSA Debit Card

This page should contain the FSA Debit Card Article ... I don;t know how to do this or post the reccomendation or I would do it. However it would make more sense to have the two articles merged.

M-BMor (talk) 23:16, 26 February 2010 (UTC)

Use It or Lose It

The federal income tax form 2441 does not seem to agree with the following paragraph from the Wikipedia article:

"A second requirement is that all applications for refunds must be made by a date defined by the plan. If funds are forfeited, this does not eliminate the requirement to pay taxes on these funds if such taxes are required. For example, if a single person elects to withhold $5,000 for child care expenses and gets married to a non-working spouse, the $5,000 would become taxable. If this person did not submit claims by the required date, the $5,000 would be forfeited but taxes would still be owed on the amount."

In Form 2441, you subtract out any forfeited dependant care FSA witholdings. I'm not sure where or how the above text was derived, but the closest I found was:

"if you don't otherwise qualify for the credit (such as only one spouse working), and you use the FSA option, you will be required to add your FSA contribution back into your income, thereby losing most of your tax savings."

The "Fool.com" paragraph makes sense (the non-working spouse is now part of the family unit, and cannot be paid from the working spouse to care for the child), but the Wikipedia paragraph doesn't differentiate where funds are forfeited, but taxes are NOT required (e.g., a family witholds $5,000, but only spends $4,000 on child care; $1,000 is forfeited, but the family does not then have to pay tax on this $1,000 the forfeited and never received).

Perhaps the Wikipedia article needs to be clearer on this point?

NT17 (talk) 06:59, 10 January 2012 (UTC)

Translation

Is anyone upto translate this article for the german version of Wikipedia? — Preceding unsigned comment added by 95.222.175.173 (talk) 21:16, 22 April 2012 (UTC)

What is the history and rationale behind these accounts?

When was the tax code changed to include these accounts? What is the rationale for providing them? What benefit does it give a taxpayer that couldn't be gotten directly if the tax code was changed to include the possibility of a direct deduction for the items deducted via the flexible spending account without going through this middleman? The account just seems to be a gift to the companies providing them without any benefit that couldn't be obtained by making the expenses deductible directly. —Preceding unsigned comment added by 4ws (talk • contribs) 21:17, 4 December 2009 (UTC)

Excellent questions! I've long wondered that myself. Captain Quirk (talk) 18:06, 5 February 2010 (UTC)

The nice thing about the FSA is that once you've set your deduction amount and schedule for the year, your employer is immediately liable for the full annual amount. For example, if on January 1st I make my first $100 monthly contribution towards a $1,200 annual FSA, and then I break my leg on January 2nd and the bill is $1,000, my employer has to pay the whole bill then wait for 9 more deduction cycles to be paid back. If I then quit or get fired on January 3, I don't have to keep paying my employer back; he/she just loses out. On the flip side, if I haven't used the entire $1,200 by the end of the year, my employer gets to keep what's left over. In other words, an FSA can help you spread out your out-of-pocket medical expenses over the course of a year without your having to worry about asking health care providers for payment plans, being sent to collections, or keeping an "unexpected deductable expense" fund. —Preceding unsigned comment added by 24.213.59.218 (talk) 16:22, 29 April 2011 (UTC)

1. I am not sure one's employer can't recoup any difference between what was paid out vs what you paid in if you are terminated. However, I am pretty sure if you had already paid in more than you used, you will have been sure-out-of-luck. 2. I think most FSAs allow an extra couple of months to use up your annual deposit, like up to Tax Day or something. Of course, this moves up the beginning of the next year's expenditures, so one might reconsider the amount they plan to set aside if the use-or-lose becomes problematic. — Preceding unsigned comment added by 132.3.37.68 (talk) 16:34, 30 November 2011 (UTC)

The IRS has allowed employers to give employees tax-free medical benefits since 1978. The intention was probably for employers to provide health insurance, but health FSAs have technically been allowable since 1978, if uncommon. FSAs are an exclusion from income, rather than an itemized deduction to federal income taxes. FSAs reduce your social security taxes and Medicare taxes, as well as your federal income taxes. The itemized deduction just reduces your federal income taxes, and even then only if you itemize your deductions. ~ Quacks Like a Duck (talk) 15:51, 1 November 2013 (UTC)