![]() ![]() If you have an employer-sponsored HSA account, the amounts you contribute are not subject to payroll or income taxes. You can also establish an HSA either independently or with your employer. Unlike an FSA, you own your HSA account and therefore it’s portable, which means that if you separate from your employer, you can take your HSA funds with you. For 2022, the minimum deductible amount for an individual HDHP is $1,400, and $2,800 for a family plan. You are covered under a high-deductible health plan (HDHP).Īn HDHP is any health insurance plan with a relatively large deductible amount.You are not claimed as a dependent on anyone else’s tax return.But unlike an FSA, you must qualify and meet the following requirements to contribute to an HSA: Similar to an FSA, an HSA allows you to stash money into a pretax account. This deadline may differ if your employer’s administrator plan does not follow a calendar year instead, you will have an additional two and a half months following the plan’s year-end date. If your employer has this feature, you’ll have until March 15 of the following year to spend your FSA funds. These features include an extended grace period or a rollover provision.Īn extended grace period allows you an additional two and a half months to spend your FSA funds. ![]() Some employers may elect one of two features that can provide some flexibility with unused funds. If you fail to do so, you’ll forfeit your FSA funds. The primary disadvantage is that, typically, most FSA accounts have a “use or lose it” feature, which means you need to spend all of your FSA funds before the end of the plan’s year. This means if you have a qualified medical expense of $1,500 but your FSA account doesn’t have the entire funds to cover it, your FSA administrator will still pay the entire claim.Īnd while that is great news, there are some disadvantages to an FSA. 1 to contribute $2,400 annually with monthly pretax contributions of $200, you’ll have access to the entire $2,400 at the start of the year. One great advantage to an FSA is that your funds are immediately made available the day you enroll.įor example, if you decide on Jan. However, the IRS does not require your employer to do that. ![]() For 2022, you can contribute up to $2,850 into a health care FSA, and your employer also may contribute on your behalf. If you separate from your job, you would forfeit your FSA funds. It’s a tax-advantaged savings account established by your employer that allows you to stash money away for yourself, your spouse or dependents.įor starters, since you can only establish an FSA with your employer, it means your employer owns your FSA account. On Cash App Taxes' Website What Is a Flexible Spending Account?Īn FSA is a great tax savings tool to effectively pay for qualified out-of-pocket health care expenses. ![]()
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