Flexible Saving Account Legal Regulations

Getting involved with a flexible saving account for your employer can make a lot of sense when you are trying to limit out-of-pocket expenses. These accounts are beneficial because the money that is set aside is not subject to taxes. It is critical that you understand the legal regulations associated with these types of accounts. Here are the basics of flexible saving account regulations.

Qualified Expenses

With this type of account, you can use the money that is saved for any qualified expenses. For example, you can use the money to pay for co-pays, deductibles, and various other medical expenses. You can also use the money to pay for dependent care for your children or for a senior citizen.

Limits

You are allowed to contribute up to $2500 per year of pretax money to your account if you are using it for medical expenses. If you are going to use the flexible saving account for dependent care, you can put as much as $5000 per year into it. If you use this money for dependent care, you will not be able to take a childcare tax credit. The credits are exclusive and you will only get one type of credit.

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