With the year end over, there still may be important tax items individuals should consider. One is your FSA, or Flexible Spending Account.
As most people know, flex spending accounts are used to provide tax deductible health expenses to employees. The types of deductible amounts available for reimbursement in 2010 include: doctor co-pays, out of pocket prescription costs, prescription co-pays, as well as more routine expenses such as cough medicine, band aids, and certain other quasi-medical expenses.
If you still had money in your FSA account and did not turn in your receipts before December 31, 2010, some plans have a grace period. This grace period is designed to allow participants to turn in receipts after year-end for reimbursement, so as to use all of the available money in the account.
Remember that FSA accounts are "use it, or lose it" so you should try to use all the money withheld from your paycheck, so you are not giving money away uselessly. Check with your plan administrator on whether or not your plan has a grace period, if it does, then you will have a short period of time to present receipts and draw down that FSA money to as close to zero as possible.
Check back in a week, when I will talk more about the changes ahead for flexible spending accounts in 2011.