What can you use flex spending on?
Flexible spending accounts (FSAs) are a popular employee benefit that allows individuals to set aside pre-tax dollars for certain healthcare and dependent care expenses. This tax-advantaged account provides a convenient way to manage and pay for out-of-pocket medical costs. But what exactly can you use flex spending on? Let’s explore the various eligible expenses that can be covered by your flex spending account.
Healthcare Expenses
The primary purpose of a flex spending account is to cover healthcare expenses. This includes a wide range of costs, such as:
– Prescription medications and over-the-counter drugs
– Doctor visits, including copayments and deductibles
– Dental care, such as cleanings, fillings, and braces
– Vision care, including glasses, contacts, and eye exams
– Medical supplies and equipment, such as crutches, walkers, and blood sugar monitors
Dependent Care Expenses
In addition to healthcare expenses, flex spending accounts can also be used to cover dependent care costs. This includes expenses for care provided to your qualifying dependents, such as:
– Daycare for children under 13 years old
– Adult day care for elderly or disabled dependents
– Before- and after-school care for children
– Summer camp for children
Eligible Over-the-Counter (OTC) Items
As of 2013, the IRS allowed for the use of flex spending accounts to cover over-the-counter medications without a prescription. This means you can use your flex spending account to pay for eligible OTC items such as:
– Pain relievers, such as ibuprofen or acetaminophen
– Cold and flu remedies
– Antacids and laxatives
– Allergy medications
Eligible Services
In addition to physical items, flex spending accounts can also be used to cover certain services. This includes:
– Physical therapy
– Occupational therapy
– Speech therapy
– Chiropractic services
– Acupuncture
Limitations and Restrictions
While flex spending accounts offer numerous benefits, it’s important to be aware of the limitations and restrictions. Here are some key points to keep in mind:
– Use it or lose it: Most flex spending accounts have a “use it or lose it” rule, meaning any unused funds at the end of the plan year may be forfeited. However, some plans offer a grace period or a carryover option.
– Plan deadlines: Be sure to check the deadlines for submitting claims and contributing to your flex spending account, as missing these deadlines could result in losing out on tax advantages.
– Documentation: Keep receipts and documentation for all eligible expenses to ensure your claims are processed correctly.
Conclusion
Understanding what you can use flex spending on is crucial for maximizing the benefits of this tax-advantaged account. By carefully planning and budgeting for eligible healthcare and dependent care expenses, you can save money and reduce your taxable income. Be sure to review your plan’s specific rules and limitations to make the most of your flex spending account.
