Anyone using FLEX spending at work for medical expenses/dependent care?

Discussion in 'Archived Threads 2001-2004' started by Brian Perry, Jun 4, 2002.

  1. Brian Perry

    Brian Perry Cinematographer

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    Now that my wife and I are shopping for day care for our upcoming baby, we are researching Flexible Spending Accounts, which enable you to have up to $5,000 deducted from your pre-tax pay to pay for covered medical care and/or dependent care such as nursing homes or day care.

    My question is whether my wife and I can each deduct $5k (we both work) or if the $5k total is per family.

    Thanks.
     
  2. Michael*K

    Michael*K Screenwriter

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    It's $5K total per household. I use the medical spending account at work and it's great.
     
  3. John_Bonner

    John_Bonner Supporting Actor

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    Remember though, if you don't use it you lose it. So if you have $3,000 deducted and your "unreimbursed" medical expenses for that calendar year don't exceed $3,000 you don't get the unused portion back.

    I did it a few years ago when my son was born. If I remember correctly I had $2,500 deducted throughout the year. Well the unreimbursed expenses from the hospital alone totalled about $1,100 (after 90% coverage). The remaining monies went toward doctor visits, prescriptions, lab bills, etc. Since my son was born in early February we had most of the calendar year to recoup expenses.
     
  4. ShawnF

    ShawnF Stunt Coordinator

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    My wife and I needed to investigate this last week as well. One thing that the CFO of my company advised me on was that if we go over the 5k, the difference can be taken as a deduction on our income taxes. So, if we pay 7k in dependent care, 2k difference can be itemized.

    Not absolutely certain if this is correct, but that was how I understood it.
     
  5. ShawnF

    ShawnF Stunt Coordinator

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    Addendum to previous post:
    The more I think about it, I believe I was told that I can itemize 20% of the excess. So if we spent 2k more, we could reduce our income by $400.

    Sorry for the confusion.
     
  6. John Garcia

    John Garcia Executive Producer

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    Unreimbursed medical and Dependent care are two different things.

    Use it or lose it is the only downside, but you can't really plan for unseen things. If you KNOW you will use a good portion of it already (regular prescription or therapy, for a condition, injury etc...), then it's great. If you don't spend much on medical annually, then maxing it out can make you lose it at the end of the year.
     

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