TaxSaver Flexible Benefits Plan
Tax Saver Two Levels of Participation: Premium Only Spending Accounts
Premium Only Allows employees to shelter premiums for: Health Insurance Group Benefits Life Ins.* Dental Insurance Vision Insurance *Excludes Dependent Premium
How do I save? With FSA No FSA Monthly Gross $2,000.00 Pre-Tax Premium $482.88 Taxable Income $1,517.12 Taxes (21.5%) $326.18 400.00 Monthly Savings $103.82 $0.00 Annual Savings $1,245.84
Stipulations: IRS rules state that you will not be allowed to make changes to your tax sheltered insurances unless you incur a change in status or, During the Annual Enrollment Period.
Status Change Examples: Change in Marital Status – Marriage, Divorce, Legal Separation, Annulment Change in the number of tax dependents – Birth, Adoption, Death Change in employment status of employee, spouse, or dependents – Termination, LWOP, FMLA, F/T to P/T
When May I Enroll? During Annual Enrollment or Within 30 days of a change in family status
Premium Only No Cost to Participate No Reenrollment
Spending Accounts Health Care Dependent Care
HC Eligible Expenses: Medical deductibles and co-payments (office visits, physicals, etc.) Dental expenses (check-ups, cleanings, braces) Vision expenses (exams, glasses, contacts) Prescription drugs
How Do I Save? With HC Acct W/out HC Acct Annual Pay $30,000.00 Spending Account Contribution $2,000.00 0.00 Taxes Paid (21.5%) $6,020.00 6,450.00 After Tax Expenses 2,000.00 Income $21,980.00 $21,550.00 Savings $430.00
HC Acct vs. Tax Deduct You may only claim medical expenses that are in excess of 7.5% of your gross income and you are required to itemize to take the deduction (7.5% of a $30,000 is $2,250). The minimum for the HC account is $100 per year so you can reap the tax benefits without having to contribute a large amount of money.
HC Acct and Insurance Prescriptions Deductibles Co-Pays Co-Insurances
Spending Accounts Dependent Care – Cost of care for children & elderly adults to enable you to work.
DC – Eligible Expenses Day-Care for Pre-K age or under. Before/After School care for children up to age 12. Summer Camp (up to age 12). Care for an elderly adult.
Spending Account Contributions DC Example: With DC Acct W/out DC Acct Annual Pay $30,000.00 Spending Account Contributions $5,000.00 0.00 Taxes Paid (21.5%) $5,375.00 6,450.00 After Tax Expenses 5,000.00 Income $19,625.00 $18,550.00 Savings $1,075.00
DC Acct vs. Tax Deduct If you claim the DC expenses as a tax deduct, the maximum expenses allowed is $3,000.00 for one dependent and $6,000.00 for two or more.
% Credit of expenses up to max. DC Acct vs. Tax Deduct Gross Annual Salary % Credit of expenses up to max. Maximum 1 dep / 2 or more 15,000.00 or less 35% 1050.00 / 2100.00 30,000.00 27% 810.00 / 1620.00 43,001.00 20% 600.00 / 1200.00
Example: If your gross annual income is $30,000.00 and you have one child in daycare with annual expenses of $5,000.00 your savings, under the tax saver plan, would equal $1,075.00 and your savings under the Tax Credit would be $810.00.
Spending Acctount Fees $ 5.10 per month $ Must reenroll each year
Annual Contribution Annual Maximum: *Health Care Acct. - $2,500 Max *Dependent Care Acct. - $5,000 Max Annual Minimum: *HC and/or DC acct. is $100.00.
Flexibility Debit Card Change in Family Status Grace Period *Employees may enroll, change accounts and/or amounts, or choose to discontinue participation during the April open enrollment period prior to each plan year. Once elections are made, they can only be changed if the participant experiences a qualifying change in family status.
Use It or Lose It Plan members should estimate their expenses carefully because remaining funds at the end of the plan year are forfeited.
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