Paying for your medical deductibles, health-related products, and dependent care with pre-tax dollars out of your Flexible Spending Account is a no-brainer.
Why? Check and see what percentage of your income goes away in taxes each paycheck (including federal, state, local, Social Security, Medicare and others).
That’s the discount you get by using pre-tax dollars and getting reimbursed out of your FSA.
But there’s a catch. You must re-up every year.
The Office of Personnel Management says that every year, many feds who’ve already figured out that starting a Flexible Spending Account is a good idea, haven’t figured out that keeping it is a great idea, because they either forget to sign up again or don’t know they have to.
One of the most-asked questions we get about FSAs is, “why won’t they let me just keep it going next year?”
The answer is simple — and we’ll tell you in tomorrow’s report.