A little-known, smart money fact is that shopping for health products with pre-tax FSA and HSA funds can save 30% or more on eligible healthcare expenses.
NEW YORK (PRWEB) March 09, 2023
The 2022 tax filing deadline is almost here, but there’s another deadline looming that could affect millions of American consumers: The March 15 grace period deadline for flexible spending accounts (FSAs). With these two critical deadlines right around the corner, Health-E Commerce, parent brand to FSA Store and HSA Store, and the leading online marketplaces that sell exclusively FSA and health savings account (HSA) eligible products, is reminding consumers of the following smart money moves that will help them reduce their taxable income and use, not lose, their tax-free healthcare dollars.
“As inflation and cutbacks continue to affect consumers of all ages, the potential to save money on taxes and to make the most out of every dollar is a top priority,” said Zack Peckham, CFO, Health-E Commerce. “At Health-E Commerce, we’re working to educate the millions of Americans who are enrolled in FSAs and HSAs about how to use these tax-advantaged accounts to support their everyday health and their financial goals.”
5 smart-money tips for FSAs and HSAs
- Don’t lose funds to a missed deadline. If you have a 2022 plan year FSA with funds left over, check if your employer offers a balance rollover or spending extension that gives you extra time to spend down dollars. For FSA plans with a December 31 spending deadline, employers may offer a 2.5 month grace period that gives account holders until March 15 to use 2022 FSA funds. Because deadline extensions are optional and not all FSAs are based on the calendar year, account holders should contact their human resources team or FSA administrator to check their deadline, any available extensions, and their balance so they avoid losing money to a missed deadline and forfeiting funds back to their employer.
- Make a last-minute HSA contribution. While the FSA is pre-funded at the time of enrollment, account holders can make contributions to the HSA throughout the year. Account holders who have not yet contributed the maximum amount to their HSA for 2022 ($3,650 for individual and $7,300 for family coverage) have until April 18 to make contributions and reduce their taxable income for 2022.
- Save money by using tax-free dollars for everyday health needs. A little-known, smart money fact is that shopping for health products with pre-tax FSA and HSA funds can save 30% or more on eligible healthcare expenses. From everyday health needs like cold and allergy products, menstrual care, and over-the-counter medications, to high-tech devices for managing high-blood pressure, diabetes, or chronic pain – FSA and HSA eligibility is extensive and surprising. Account holders should use an online eligibility list to identify healthcare expenses that they could be paying for with tax-free funds.
- Save HSA receipts in case of an audit. While FSA expenses are verified and approved by the account administrator as they are incurred and submitted, HSA activity is not. This means that account holders are responsible for proving eligibility in case of an audit by the Internal Revenue Service. For this reason, it’s vital that HSA users save and organize receipts for each year they are enrolled in the account. Online receipt trackers can be a valuable tool in this effort.
- Reduce taxable income with spending account contributions. Want to pay less in taxes? Enroll in an FSA during your annual open enrollment period, or open an HSA at any time during your plan year (as long as you are enrolled in a qualified, high-deductible health plan) and make contributions to the account. Any amount contributed is considered pre tax, which means it reduces the account holder’s taxable income. Even if you aren’t able to contribute the maximum amount, you can still benefit from funding the account. Not sure how much to contribute? Interactive tools and calculators can help account holders estimate healthcare expenses and determine how much to contribute and how much you might save in taxes.
To learn more about FSA and HSA rules and smart-money moves, visit the Learning Center at FSA Store or HSA Store.
About Health-E Commerce
Health-E Commerce is the parent brand to FSA Store, HSA Store and WellDeservedHealth, a family of online marketplaces that serve the 70+ million consumers enrolled in pre-tax health and wellness accounts. The company also created Caring Mill, a popular private-label line of health products that benefits Children’s Health Fund and enables customers to make a donation with each purchase. Since 2010, the Health-E Commerce brands have led7 the direct-to-consumer e-commerce market for exclusively pre-tax health and wellness benefits. Health-E Commerce plays an essential role in expanding product eligibility for important new categories within the list of eligible medical expenses.