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De México
664-979-2020
Toll Free
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Flex Spending Accounts

What is an FSA?

A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.

You don’t pay taxes on this money. This means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

Employers may make contributions to your FSA, but aren’t required to.

A few fast facts about FSAs

  • FSAs are limited to $2,600 per year per employer. If you’re married, your spouse can put up to $2,600 in an FSA with their employer too.
  • You can use funds in your FSA to pay for certain medical and dental expenses for you, your spouse if you’re married, and your dependents.
  • You can spend FSA funds to pay deductibles and copayments, but not for insurance premiums.
  • You can spend FSA funds on prescription medications, as well as over-the-counter medicines with a doctor's prescription. Reimbursements for insulin are allowed without a prescription.
  • FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits.

 

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What is an HSA?

A Health Savings Account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. You must be an eligible individual to qualify for an HSA.

 

  • No permission or authorization from the IRS is necessary to establish an HSA. You set up an HSA with a trustee. A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. The HSA can be established through a trustee that is different from your health plan provider.

 

What are the benefits of an HSA?   You may enjoy several benefits from having an HSA.

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Schedule A (Form 1040).
  • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
  • The contributions remain in your account until you use them.
  • The interest or other earnings on the assets in the account are tax free.
  • Distributions may be tax free if you pay qualified medical expenses. See Qualified medical expenses , later.
  • An HSA is “portable.” It stays with you if you change employers or leave the work force.

 

Qualifying for an HSA

To be an eligible individual and qualify for an HSA, you must meet the following requirements.

  • You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
  • You have no other health coverage except what is permitted under Other health coverage , later.
  • You aren’t enrolled in Medicare.
  • You can’t be claimed as a dependent on someone else's 2016 tax return.

 

Medicines and Drugs From Other Countries

In general, you can't include in your medical expenses the cost of a prescribed drug brought in (or ordered shipped) from another country. You can only include the cost of a drug that was imported legally. For example, you can include the cost of a prescribed drug the Food and Drug Administration announces can be legally imported by individuals.

You can include the cost of a prescribed drug you purchase and consume in another country if the drug is legal in both the other country and the United States.

Nonprescription Drugs and Medicines

Except for insulin, you can't include in medical expenses amounts you pay for a drug that isn't prescribed.

 

 

What Medical Expenses Are Includible?

Following is a list of items that you can include in figuring your medical expense deduction. The items are listed in alphabetical order.
This list doesn't include all possible medical expenses. To determine if an expense not listed can be included in figuring your medical expense deduction, see What Are Medical Expenses, earlier.

 

Ambulance

You can include in medical expenses amounts you pay for ambulance service.

 

Bandages

You can include in medical expenses the cost of medical supplies such as bandages.

 

Contact Lenses

You can include in medical expenses amounts you pay for contact lenses needed for medical reasons. You can also include the cost of equipment and materials required for using contact lenses, such as saline solution and enzyme cleaner. See Eyeglasses and Eye Surgery , later.

Drugs

See Medicines, later.

 

Eye Exam

You can include in medical expenses the amount you pay for eye examinations.

 

Eyeglasses

You can include in medical expenses amounts you pay for eyeglasses and contact lenses needed for medical reasons. See Contact Lenses , earlier, for more information.

Eye Surgery

You can include in medical expenses the amount you pay for eye surgery to treat defective vision, such as laser eye surgery or radial keratotomy.

 

Laboratory Fees

You can include in medical expenses the amounts you pay for laboratory fees that are part of medical care.

 

Meals

You can include in medical expenses the cost of meals at a hospital or similar institution if a principal reason for being there is to get medical care.
You can't include in medical expenses the cost of meals that aren't part of inpatient care. Also see Weight-Loss Program and Nutritional Supplements , later.

 

Medicines

You can include in medical expenses amounts you pay for prescribed medicines and drugs. A prescribed drug is one that requires a prescription by a doctor for its use by an individual. You can also include amounts you pay for insulin. Except for insulin, you can't include in medical expenses amounts you pay for a drug that isn't prescribed.

 

Imported medicines and drugs.  

If you imported medicines or drugs from other countries, see Medicines and Drugs From Other Countries , under What Expenses Aren't Includible, later.

 

Optometrist

See Eyeglasses , earlier.

 

 

Transportation

You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.

 

You can include:  

Bus, taxi, train, or plane fares or ambulance service,

 

Transportation expenses of a parent who must go with a child who needs medical care,

 

Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and

 

Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment.

 

Car expenses.   You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. You can't include depreciation, insurance, general repair, or maintenance expenses.

 If you don't want to use your actual expenses for 2016, you can use the standard medical mileage rate of 19 cents a mile.

 

You can also include parking fees and tolls. You can add these fees and tolls to your medical expenses whether you use actual expenses or the standard mileage rate.

Example.

 

In 2016, Bill Jones drove 2,800 miles for medical reasons. He spent $450 for gas, $30 for oil, and $100 for tolls and parking. He wants to figure the amount he can include in medical expenses both ways to see which gives him the greater deduction.

 

He figures the actual expenses first. He adds the $450 for gas, the $30 for oil, and the $100 for tolls and parking for a total of $580.

 

He then figures the standard mileage amount. He multiplies 2,800 miles by 19 cents a mile for a total of $532. He then adds the $100 tolls and parking for a total of $632.

 

Bill includes the $632 of car expenses with his other medical expenses for the year because the $632 is more than the $580 he figured using actual expenses.

 

Transportation expenses you can't include.    You can't include in medical expenses the cost of transportation in the following situations.

Going to and from work, even if your condition requires an unusual means of transportation.

 

Travel for purely personal reasons to another city for an operation or other medical care.

 

Travel that is merely for the general improvement of one's health.

 

The costs of operating a specially equipped car for other than medical reasons.

 

Trips

You can include in medical expenses amounts you pay for transportation to another city if the trip is primarily for, and essential to, receiving medical services. You may be able to include up to $50 for each night for each person. You can include lodging for a person traveling with the person receiving the medical care. For example, if a parent is traveling with a sick child, up to $100 per night can be included as a medical expense for lodging. Meals aren't included. See Lodging , earlier.

 

You can't include in medical expenses a trip or vacation taken merely for a change in environment, improvement of morale, or general improvement of health, even if the trip is made on the advice of a doctor. However, see Medical Conferences , earlier.

 

 

Vision Correction Surgery

See Eye Surgery , earlier.

 

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