Answer To Cash From FSA Card & Return FSA Items For Cash
In simple terms, a person is unable to receive cash from the fixable spending account,irrespective of the amount of money in said account. The Internal Revenue Service has a strictset of rules that have to be followed by holders of a fixable spending account.Holders of the fixable spending account can return items from drug stores or any health-relateditems for cash, however, this depends on the heath store that said items were purchased from.Some retailers may return items for store credit, or directly refund the money to the consumersflexi card.
Functions of a fixable spending account
Health care – one of the main functions of a fixable spending account is health care foremployees. According to my research, the standard contribution to the fixable spendingaccount id $2600.00. The fixable spending account does not cover all medical expenses. Majority fixablespending accounts cover dental care and eye care only. The fixable spending account can also be used for dependent care. According to myresearch, the contribution thereto is approximately $5000.00. Dependents may beconsidered as children under the age of 13, a spouse or a relative with disabilities (physicalor mental).
What happens if a fixable spending account card is used for non-approved purchases?
Some stores have systems that keep track of the approved products. When a consumertries to purchase a product that has not been approved, the system automatically rejects theproduct and the consumer then has to purchase said product desperately. Sometimes aconsumer may mistaken their debit or credit card for the fixable spending account card andpurchase non-approved items. These purchases need to be reported and according toresearch a 20% (twenty percent) penalty will be charged for said purchase. These activitiescould result in fraud charges being pursued against you, if the mistake is not reported.Employers may notice a consumer spending money on non-approved items and have theright to deactivate the card if said card is being abused. You may also have to repay youremployer for improper purchases. If you fail to do so, your employer may legally deduct theamount owing from your paycheck at the end of the month. Your employer then has the rightto decide whether or not to re-activate your fixable spending amount card.
What are approved purchases on a fixable spending account card?
There are a wide range of health care items that can be purchases on the fixable spendingaccount. According to my research, these include but are not limited to:
Dental care treatments – braces, medical procedures to remove teeth or any dentalhygiene procedure that is within budget range. Eye care – new spectacles, contact lenses or any eye surgery that is required andwithin budget range. Over the counter medication within budget include but is not limited to acne andskincare creams or medication, ointments and creams, allergy and asthma relief,baby care products, breathing care, cold and flu relief, diabetes medication, etc. Ear care treatments within budgets. Fertility and menstrual care in the form of pregnancy tests, ovulation kits, pads ortampons. The fixable spending account does not cover extensive fertility treatmentssuch as in vitro fertilization or similar procedures. Support braces, minimal pain management care as well as mobility assistance.
Where can a fixable spending account card be used?
Grocery stores including but not limited to Costco, Target, Walgreens and Walmart. Drug stores and hospitals FSA approved stores.
Conclusion
After going through the above, it is imperative to understand a fixable spending accountcan benefit the receiver does not abuse the card by using it for non-approved products. Itis also important to understand that if the holder of the card abuses the card, there willbe consequences. My suggestion is that the card holder does not overuse said card andstay within budget range to avoid any problems that may arise in the future.
Are taxes paid on money in an FSA?No, you pay into an FSA before tax deductions, meaning tax is not paid on themoney that is paid into the fixable savings account. Do you have to use the money in your FSA during an annual term?Yes, however, a grace period of 2 ½ months are provided in order for card holders touse the money, and a carry-over of $550 is allowed annually.
