Learn The Tax Benefits Of A Flexible Benefits Plan

Learn The Tax Benefits Of A Flexible Benefits Plan



Learn the​ tax benefits of​ a​ Flexiblebenefits Plan
Flexiblebenefits Plan FBP is​ an employee benefits plan which helps the​ employees’ to​ save considerable amount of​ taxes by paying certain expenses from their pretax income. Some of​ the​ eligible expenses from pretax income are medical,​ vision,​ dental,​ elder care,​ and dependent care. All state employees who get a​ regular paycheck are entitled to​ participate in​ the​ flexiblebenefits plan.
Flexiblebenefits Plan mainly boasts three components
Health Flexible Spending Account HFSA
Dependent Care Reimbursement Account DCRA
Health insurance premium deduction
Flexiblebenefits Plan’s reimbursements are made occasionally,​ mostly once in​ a​ week. you​ will receive statements which helps you​ to​ keep updated on​ your account. Quick information about your account can be accessed with the​ help of​ customer service line or​ email.
Due to​ the​ program’s tax exempt features,​ the​ federal government strictly regulates the​ Flexiblebenefits Plan. FBPs are regulated by sections 125 and 129 of​ the​ Internal Revenue Code IRS. Hence it​ is​ advisable to​ review the​ IRS rules before you​ enroll. if​ you​ wish to​ enroll in​ the​ FBP,​ then it​ is​ better from your part to​ discuss how the​ program may benefit you​ with your financial planner or​ tax advisor.
How does a​ Flexiblebenefits Plan work?
On enrolling in​ a​ flexiblebenefits plan you​ first have to​ decide how much amount you​ need to​ earmark for your Dependent Care Reimbursement Account and/or Health Flexible Spending Account. After you​ have fixed a​ particular amount for your account,​ your employer will deduct the​ amount every month from your salary for the​ flexiblebenefits plan. the​ deducted amount will be immediately credited to​ your accounts you​ have already specified.
Reimbursement
Whenever you​ had met with an eligible expense,​ you​ can submit a​ claim for reimbursement. While submitting a​ claim,​ make sure that you​ have provided all necessary documents supporting your claim. Reimbursements are generally made weekly.
Health Flexible Spending Account HFSA
While submitting a​ claim for reimbursement,​ first submit all your health care claims according to​ your health care plan. if​ there is​ any amount which is​ not covered according to​ your health care plan,​ you​ can claim those amounts for reimbursement with your Health Flexible Spending Account. While submitting a​ claim,​ make sure that you​ have provided a​ copy of​ an Explanation of​ Benefits EOB or​ your receipt together with your Flexiblebenefits Plan Reimbursement Request.

Dependent Care Reimbursement Account DCRA
You can submit a​ claim for your dependent care expenses by providing a​ copy of​ your receipt to​ a​ complete FlexibleBenefits Plan Reimbursement Request. you​ can also provide a​ complete Reimbursement Request signed by your dependent care provider.
Monitoring your account
It is​ advisable to​ keep a​ close eye on​ your account every time you​ make a​ claim or​ when ever you​ get a​ FlexibleBenefits Plan reimbursement check. Generally you​ will also obtain an Explanation of​ Benefits which displays your uptodate details of​ deposits,​ the​ claims you​ had submitted,​ the​ claims you​ were paid,​ and the​ remaining amount you​ have in​ your account.
Besides this,​ you​ will be provided with an Account Status Report,​ in​ most cases three months before the​ end of​ your FlexibleBenefits Plan year. the​ report displays your total accounts and reminds you​ to​ submit any outstanding claims. This helps you​ to​ avoid any forfeiture.
Unused funds
According to​ the​ IRS regulations,​ you​ need to​ forfeit any unspent funds in​ your FlexibleBenefits Plan at​ the​ end of​ each plan year. Hence you​ must be very careful to​ plan your contributions and to​ make sure you​ have submitted request for all eligible reimbursements. Also make sure that you​ have submitted your request with all documentary proof. Keep in​ mind that it​ is​ always better to​ underestimate your eligible expenses than to​ overestimate them and risk forfeiture.




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