Consult your CPA about ways to save money.

Does your employer offer an FSA or cafeteria plan for medical expenses not covered by insurance?

FSAs let employees pay some health-care expenses with pre-tax compensation dollars.

The tax savings can be substantial. FSAs may cover much more than you’d suspect, including expenses a medical insurance plan would not think of covering, such as non-prescription drugs or fertility enhancement. Prepaid orthodontist bills can be reimbursed up front from flex plans; workers can use remaining funds to pay dependent care costs that arise after they leave their job; and members without health

insurance can buy it out of their flex plans. Amounts in flex plans unused at year-end are forfeited, except that some plans give a 2½ month period after the end of the calendar year to use up contributions. If you or your spouse has a dependent-care flex account, and the employer prevents that spouse from making additional contributions (e.g., so as not to violate nondiscrimination rules), the other can start funding a flex plan. If both have flex plans and the total in their accounts at year-end may exceed the $5,000 annual cap, one spouse can stop the funding. If you use a flex plan for dependent-care costs for a disabled child, you might still be able to claim a credit for expenses that exceed the amount in your FSA. The credit applies to up to $6,000 of eligible expenses for filers with two or more kids under age 13.

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