Page 11 - 2022 CPI Card Benefits Guide

How You Can Save on Taxes With FSAs and HSAs

Here’s an example of how much you can save when you use the FSAs or HSA to pay for your predictable health
care and dependent care expenses.

Health Care FSA or HSA Dependent Care FSA

Without Account With Account Without Account With Account

Your Taxable
Annual Income $60,000 $60,000 $60,000 $60,000

Account
Deposit N/A $2,500 N/A $5,000
(Before Taxes)

Taxable Wages $60,000 $57,500 $60,000 $55,000

Federal &
Social Security $16,800 $16,100 $16,800 $15,400
Taxes

Expense
(After Taxes) $2,500 N/A $5,000 N/A

Take Home
(Net) $40,700 $41,400 $38,200 $39,600

Annual Tax $700 $1,400
Savings $0 $0

You cannot be enrolled in both FSA and HSA. FSA is for those in Buy-Up or Base PPO medical plans and HSA is for those in the HDHP medical plan.

It’s Easy to Use These Accounts. Important Notes!

There is a “use it or lose it” rule imposed by the IRS.
First, you contribute to the account(s) In other words, if you do not spend all the money in
1 with pretax dollars deducted from your your FSA by the deadline, any unused dollars in your

paycheck. That means no taxes (federal, account(s) after the deadline will be forfeited.
state or Social Security) will be withheld
from any of those dollars.
If you are a participant in a Health Savings
Then, you pay for certain eligible Account (HSA), you are not eligible for the Health
2 expenses out of your pocket as usual. Care FSA reimbursement account.
You may use your debit card or submit
a claim (along with the appropriate
documentation) to be reimbursed for
those expenses from the dollars in
your account.

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