Flexible Savings Accounts (FSAs) are often offered by companies to help their employees save money by setting aside income from paychecks to pay for health-related expenses without being taxed. For many Flexible Savings Account holders, the deadline for using the funds set aside is the end of the calendar year. Medical FSAs usually provide the account holder with a debit card that can be used to pay for a wide variety of health-related expenses. Co-payments and co-insurance for visits to the doctor can be paid with the tax-free account, as can prescription and over-the-counter medications.
One unfortunate drawback from the employee’s perspective is the possibility of forfeiting the money set aside if left unused at the end of the year. I don’t have a Flexible Savings Account right now, but if I had been putting aside $100 each paycheck for myself, I would want to make sure I didn’t lose any of that money. Now that we’re approaching the end of the year, many people are likely in this predicament. FSA participants must find qualifying ways to spend hundreds or thousands of their own dollars.
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Almost anything that the IRS considers a valid medical expense for tax deductions will qualify for FSA spending. Here are ten qualifying purchases that might surprise you.
- Travel and transportation. The miles you drive to and from necessary medical care qualifies for reimbursement from your FSA at the rate of $0.24 per mile. Keep a driving log and submit your details for reimbursement, as the debit card won’t come in handy for this particular expense. All travel expenses are considered. If you need to fly outside the United States for medical care, that is covered as well.
- Car modifications. If you’re looking to pimp your ride, you may be able to pay for the expenses with your pre-tax dollars in your FSA. There is a catch: the modifications must be approved by a medical professional in order to treat a condition. That leads me to believe adding accessibility features might be covered but if you’re looking for a Nitrous Oxide Systems upgrade, you may be out of luck.
- Lodging. Your FSA will cover lodging expenses incurred for required medical care. If you visit a hospital out-of-town for specialized care and need to stay in the area but not necessarily at the hospital, or if you visit a specialist with her own practice, your stay in a hotel can be paid with funds from your FSA.
- Abortions. Medical abortions are qualified medical expenses. Congress will be in heated debate soon about whether abortions should be eligible for federal assistance under the new Health Reform law. Meanwhile, you can continue to pay for an abortion with money you set aside to be exempt from income taxes.
- Over-the-counter cough syrup. This is a good option for end-of-the-year spending. Cough syrup most likely won’t expire for several years, and almost everyone suffers from colds once in a while. If you use cough syrup to ease your symptoms you can stock up now.
- Swimming lessons. If a doctor advises you to learn to swim for the treatment of a medical condition, use your FSA to pay for the expenses. Aquatic therapy is used to help with arthritis and joint stress and is also used to ease some symptoms of cerebral palsy and autism.
- Condoms. If you use condoms or other contraceptives, you can pay for these items with your Flexible Spending Account. Buy in bulk now for the future.
- Sunscreen. Not all sunscreen qualifies for payment from a Flexible Spending Account. Look for sun block with an SPF rating of 30 or higher as well as other sunburn creams and ointments.
- Viagra. Viagra and similar medications are prescription drugs, so they qualify as legitimate medical expenses for your FSA dollars. Combine this with some of the other items listed here, and you’ll be set for a good time.
- Weight loss programs. If a doctor suggests a wight loss program or drugs to treat a medical condition, then these expenses can be paid for with your FSA debit card. If you’re just looking to fit back into the jeans you wore in college, you are out of luck.
The good news is that your FSA will always cover Band-Aid bandages, even if you just plan on wearing them as fashion accessories. Have you used your FSA for any interesting expenses?