If you want to save money on dental care and reduce your taxes at the same time, then you will want to investigate Flexible Spending Accounts (FSAs).
An FSA lets you invest part of your pre-tax earnings into an account for qualified health care expenses, including general dentistry treatments such as cleanings or crowns. The money you contribute to the account reduces your taxable income, which means lower Federal, Social Security, and, in most cases, state and city income taxes. How much you save will vary depending on your salary, tax filing status, and contribution amounts.
An FSA is a smart move if you want to reduce taxes and maximize your dental health benefits. Dr. Thomas G. Zarger, serving Maryville, Oak Ridge, and Knoxville, regularly helps his patients coordinate dental care and FSAs so they can get the most out of every dollar they earn and ensure their dental health.
FSAs are programs offered by employers that allow their employees to pay for eligible out-of-pocket health care expenses with pre-tax dollars. In addition to spending pre-tax dollars on health care, setting aside pre-tax dollars also reduces an employee’s overall taxable income. Depending on a person’s tax bracket and other factors, they may be able to save from 20 percent to more than 40 percent on the cost of out-of-pocket health care expenses as compared to using after-tax dollars.
After you create an FSA, you decide each year how much you want to set aside depending on what dental expenses you anticipate for the coming year. Then, in equal installments throughout the year, you will see regular payroll deductions, which will be placed in your FSA. The money in your FSA is earmarked for medically necessary expenses that are not covered or fully covered by insurance.
Typically, these expenses include:
- Deductibles or co-insurance costs
- Fluoride treatments
- Root canals
Cosmetic procedures, such as teeth whitening, are not covered. In addition, some companies may also have limits on orthodontia treatments as well.
To understand the rules that your company has in place regarding FSAs, you should contact your Human Resources (HR) department. Your HR department can explain how and when you can enroll, how much you can contribute, and what spending rules are in place.
FSA accounts are typically limited to $2,500 a year. There are additional rules about how unspent funds are handled at the end of each year. Some companies have a use-it-or-lose it rule while others allow some flexibility for unspent funds.
Each company FSA is different, so it is important to talk to your HR department so that you understand the rules.
How Much Should You Set Aside?
Calculating how much you should set aside for dental care each year may seem difficult, but our staff can help map out your future dental treatments so you can make an educated estimate. Your treatment plan can include preventative treatments such as cleanings and X-rays or restorative work, such as crowns, bridges, or implants.
Whatever your needs, our team can help you maximize your benefits while making sure you get the dental care you need. If you would like to learn more about how we can help with your FSA, please contact us.