If you are looking for a way to lower your taxable income, consider enrolling in a Flexible Spending Account (FSA), a pre-tax benefit offered by the University to help offset the costs of health care and dependent care for plan participants in one of the following groups:
By placing money in an FSA, says Jan Katz, training coordinator, Benefits Office, I get the tax break for supplemental medical expenses without the hassle of preparing itemized tax schedules at the end of the year. I get tax breaks on doctors office visits and prescription co-pays, chiropractor visits, and vision therapy and Internet contact lens orders bills I normally wouldnt bother to itemize for tax purposes. The ease of using an FSA makes these savings possible.
Two types of FSAs are available:
For a list of eligible expenses, see IRS publications 502 and 503 on the Web, www.IRS.gov/forms-pubs/pubs.
Here is how to participate in an FSA:
Decide how much money you wish to put into the account(s) by estimating your 2002 eligible Health Care and Dependent Care expenses. To help you determine your FSA contribution and potential tax savings, use the worksheet in the Flexible Spending Account plan book available through the Benefits Office.
For a Health Care FSA, you can contribute $120 to $5,000 each year; for a Dependent Care FSA, you can contribute a maximum of $5,000 per year for single taxpayers and for married taxpayers filing a joint tax return, or $2,500 per year for married taxpayers filing separate tax returns.
Note: Highly compensated staffthose with gross earnings in 2001 of $85,000 or morecan contribute $3,600 per year to a Dependent Care FSA. Participants must re-enroll every year.
It is important to plan carefully how much money to put into your FSA, because tax rules require that unclaimed money remaining after the end of the plan year be forfeited.
Enroll in an FSA during Open Enrollment, Oct. 819, for 2002.
Contribution amounts will be deducted from your paycheck according to your pay scheduleover 12 pay periods if paid monthly. However, contributions do not reduce salary amounts used to calculate other benefits, such as retirement plan contributions and insurance plans.
To be reimbursed for eligible expenses after they are incurred, complete and sign a simple claim form and include a detailed receipt as proof of services rendered. You can submit your claim to SHPS, the Universitys claim processor, by mail or by fax.
SHPS will then reimburse you. You can choose to receive payment by check or by Electronic Funds Transfer, which deposits your reimbursement directly into your designated bank account.
To obtain a 2002 Flexible Spending Accounts plan book containing complete information about FSAs and how they work, request a book by sending e-mail to email@example.com. Include in your message the plan book name, your name, address and daytime telephone number.
If you have questions about FSAs, call the HR/Payroll Service Center, (734) 615-2000 or (866) 647-7657.