Flexible Spending Accounts (FSA) - Dependent and Health Care

The IRS just released the 2018 election limits for the following Flexible Spending Account (FSA) options:
 
Commuter Plans
Both PARKING and TRANSIT monthly limits are $260
 
Health FSA (Limited and Full Purpose)
$2650
 
No other changes election limit updates were announced. 

 

flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up by your employer.

Dependent Care FSA - These are pre-tax dollars that can be used to pay for qualified child care or caregivers for children up to age 13, or a disabled child or spouse. 

Health Care FSA - These are pre-tax dollars used to reimburse eligible health care expenses not covered by your plan (out of pocket expenses such as deductibles, co-pays and prescriptions). 

Plan carefully how much you deposit into an FSA account since you generally must forfeit remaining funds at the end of the year. Depending on your employer plan, you may be allowed to carry over to the next plan year up to $500 of your unused balances remaining at the end of the year. 

How much you can contribute
The minimum and maximum amounts you can contribute to the Dependent Care FSA are set by your employer, within IRS guidelines. The maximum allowed by the IRS is $5,000 a year for individuals or married couples filing jointly, or $2,500 for a married person filing separately. Please note: married couples have a combined $5,000 limit, even if each has access to a separate FSA through his or her employer. 

Your employer also sets the minimum and maximum amounts you can contribute to the Health Care FSA, within IRS guidelines which allow a maximum of $2,650 in 2018. 

Verify rules with your employer
Make sure to check with your employer about their specific limits, how to apply, how and when to submit receipts, etc. 
 

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