Flexible Spending Accounts

No matter how comprehensive your medical benefits are, you will almost always incur some out-of-pocket expenses. Flexible Spending Accounts (FSAs) offer a convenient way to pay for certain health and dependent care expenses—and save on taxes at the same time. When you direct part of your pre-tax salary to an FSA, you lower your taxable income for the year. Generally, this means paying less money in taxes and having the opportunity to receive more take-home pay.

Boston University offers two FSAs; you may participate in one or both, even if you do not enroll in the health or dental plans.

The Dependent Care FSA can help you save on childcare costs for dependent children up to age 13, or care for an incapacitated dependent of any age. It’s available when dependent care is necessary to allow both you and your spouse or domestic partner to work, or your spouse or domestic partner to attend school full time.

The Health Care FSA helps you pay eligible expenses that are not covered or fully reimbursed by your health, prescription drug, dental, and vision coverage. Deductibles, co-insurance, and co-payments can all be reimbursed from your Health Care FSA.

For a list of possible eligible expenses under the Health Care and Dependent Care FSAs, visit www.irs.gov. There, you also can download IRS Publication 502 (health care) and IRS Publication 503 (dependent care). Note that certain items described in Publication 502 are not eligible for reimbursement from your Health Care FSA—for example, premiums for other insurance, amounts paid for long-term care coverage, or expenses that are covered under medical plans.