Do you want to save tax dollars?
By Patricia Harris, human resources

If you want to save tax dollars, you might consider enrolling in a Flexible Spending Account. ASU offers both Health Care and Dependent Care Flexible Spending Account Plans. It is an innovative way to save tax dollars. With the Flexible Spending Account, you set aside part of your salary to pay health care and dependent/child care expenses before your money is taxed. You pay NO federal, state, or Social Security tax on this money. What you have been paying in taxes on these expenses can now be money in your pocket.

Tax Savings Example:

*Assumes 15% Federal Income Tax, 5% State Income Tax and 7.65% Social Security Tax
**Assumes health-related and child/dependent care expenses $3,000

Health Care Reimbursement Accounts
In general, Health Care expenses for you and your dependants are eligible for reimbursement from the Health Care Flexible Spending Account if the expenses qualify as a medical expense for federal income tax purposes under Section 213 of the Tax Code. Co-payments, coinsurance, deductibles, or certain vision, hearing, or dental care costs are some of the eligible expenses. See IRS Publication 502, www.irs.gov, for further information on the types of health care expenses eligible for reimbursement or contact ASU’s Human Resources office. You don’t need to participate in a Health Insurance Plan in order to participate in the Health Care Flexible Spending Account. The amount of salary which can be contributed to the Spending Account is limited to $3,600 per plan year.

Dependent Care Reimbursement Accounts
Dependent Care expenses are reimbursable for children ages 13 and under or disabled dependents provided that they satisfy the definition of a "Qualifying Relative" under the federal tax law. You may be reimbursed by this plan for payments you make to a relative who provides dependent care services, except for payments you make to your child or other dependants. Eligible Dependent Care expenses are work-related expenses (See IRS Publication 503, www.irs.gov) incurred for qualifying individuals. These expenses include housekeepers (when babysitting services are included), babysitter, licensed day care center costs, and schooling costs for children not yet in the first grade. If you are married and file a joint return, file as a head of household, or as a single, you may contribute up to $5,000 per plan year to your dependent care spending accounts. The limit is $2,500 if you are married and file a separate return.

How It Works
• You set aside funds in your flexible spending account through payroll deduction before your salary is taxed. (You must re-enroll in the flex spending each open enrollment period for the upcoming plan year.)

• You receive your health or dependent care service and pay for the expenses.
You send your receipt with a completed claim form to the ASU Business Office. (Claim forms can be downloaded from www.aug.forms website.)

• The Business Office will reimburse you from your flexible spending account through direct deposit.

Plan Carefully
Whether you participate in a Health Care or Dependent Care Flexible Spending Account, you’ll need to set your annual contribution goal amount(s) carefully. Estimate your anticipated out-of-pocket expenses as accurately as possible to put aside enough to cover them without contributing more than you need. The federal government requires that you forfeit any funds remaining in your account at the end of the plan year; therefore, if you don’t use the available funds in your account, you lose it. It is very important that you become familiar with the types of expenses that are eligible and ineligible for reimbursement before selecting your annual contribution amount.

If you have questions or need additional information, please contact Patricia Harris in Human Resources at 706-737-1763

Other News Stories: President's Award | Employee of the Year | Trustees | MAT | Director of Major Gifts | Acting Director Human Resources | Golf House | Customer Service Champion | Student Activities Center | Woman of Excellence | Study Abroad | Children and the Internet | Saving Tax Dollars | Table of Contents

June 2006
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