Tax Deduction Limits
Medical FSA Beats Tax Deduction Limits
Medical tax deduction limits and use of a flexible spending account are important topics that growing families need to know. Many growing families often must cope with a variety of qualified un-reimbursed medical expenses that might allow them to save money on taxes. The key to unlocking maximum tax savings is understanding the advantages of a Flexible Spending Account (FSA), the limitations of deducting medical expenses using Schedule A, and using both tax vehicles in an appropriate manner.
Schedule A Medical Tax Deduction Limits
Schedule A limits deductions in when your expenses are too low. Contributing money for predictable expenses to your FSA helps beat these IRS limits in three different ways, which are explained in greater detail below.
Predictable and Unexpected Deductions
While using your FSA has many advantages there is one drawback that is crucial to understand, and explains why you should only use predictable expenses. Any money you contribute to your FSA will be lost if not spent within 12 months. You must have qualifying medical expenses to get your money back from the account. Many employers choose to provide a three month grace period, but you still must incur these costs to get your money back.