[et_pb_section fb_built=”1″ _builder_version=”4.5.3″ _module_preset=”default” custom_padding=”0px||0px||false|false”][et_pb_row module_class=”inner_top_heading” _builder_version=”4.5.3″ _module_preset=”default” background_color=”#5e5e60″ background_image=”https:\/\/ighcp.com\/ebs\/wp-content\/uploads\/2021\/07\/bg-grey.png”][et_pb_column type=”4_4″ _builder_version=”4.5.3″ _module_preset=”default”][et_pb_text admin_label=”Text” module_class=”heading_top” _builder_version=”4.9.10″ _module_preset=”default” text_font=”|600|||||||” text_text_color=”#ffffff” text_font_size=”36px” header_text_color=”#ffffff” custom_padding=”|||20px|false|false”]<\/p>\n
What is a Flexible Spending Account (FSA)?<\/p>\n
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Flexible Spending Accounts<\/p>\n
Information for Employees<\/p>\n
Flexible spending accounts, or FSAs, provide you with an important tax advantage that can help you pay health care and dependent care expenses on a pretax basis. By anticipating your family\u2019s health care and dependent care costs for the next plan year, you can lower your taxable income.<\/p>\n
Essentially, the Internal Revenue Service (IRS) set up FSAs as a means to provide a tax break to employees and their employers. As an employee, you agree to set aside a portion of your pretax salary in an account, and that money is deducted from your paycheck over the course of the year. The amount you contribute to the FSA is not subject to social security (FICA), federal, state or local income taxes\u2014effectively adjusting your annual taxable salary. The taxes you pay each paycheck and collectively each plan year can be reduced significantly, depending on your tax bracket. As a result of the personal tax savings you incur, your spendable income will increase.<\/p>\n
The example that follows illustrates how an FSA can save money~<\/strong><\/p>\n **This example is for illustrative purposes only. Every situation varies and it is recommended you consult a tax advisor for all tax advice.<\/em><\/p>\n Bob and Jane\u2019s combined gross income is $30,000. They have two children and file their income taxes jointly. Since Bob and Jane expect to spend $2,000 in adult orthodontia and $3,000 for day care in the next plan year, they decide to direct a total of $5,000 (both contributing the maximum amount of $2,500. Contribution limit increases to $2,550 for taxable years beginning in 2015) into their FSAs. (See table)<\/em>[\/et_pb_text][et_pb_text _builder_version=”4.9.10″ _module_preset=”default”]<\/p>\n Flex Questions? Contact the EBS Flex Department\n\n
\n <\/td>\n Without FSA<\/strong><\/td>\n With FSA<\/strong><\/td>\n<\/tr>\n \n Gross income<\/td>\n $30,000<\/td>\n $30,000<\/td>\n<\/tr>\n \n FSA contributionsDCA Contributions<\/td>\n $0<\/td>\n -$2,000-$3,000<\/td>\n<\/tr>\n \n Gross income<\/td>\n $30,000<\/td>\n $25,000<\/td>\n<\/tr>\n \n Estimated taxes<\/strong><\/td>\n <\/strong><\/td>\n <\/strong><\/td>\n<\/tr>\n \n Federal<\/td>\n -$2,550*<\/td>\n -$1,776*<\/td>\n<\/tr>\n \n State<\/td>\n -$900**<\/td>\n -$750**<\/td>\n<\/tr>\n \n FICA<\/td>\n -$2,295<\/td>\n -$1,913<\/td>\n<\/tr>\n \n After-tax earnings<\/strong><\/td>\n $24,255<\/strong><\/td>\n $20,561<\/strong><\/td>\n<\/tr>\n \n Eligible out-of-pocket medical and dependent care expenses<\/td>\n -$5,000<\/td>\n $0<\/td>\n<\/tr>\n \n Remaining spendable income<\/td>\n $19,255<\/td>\n $20,561<\/td>\n<\/tr>\n \n Spendable income increase<\/strong><\/span><\/td>\n \u2014<\/strong><\/span><\/td>\n $1,306<\/strong><\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\nEmail: Flex@ebs-tpa.com
\nPhone: 800-373-1327[\/et_pb_text][et_pb_text _builder_version=”4.9.10″ _module_preset=”default”]