Page 8 - 2015 New Hire Guide
P. 8
New Hire
Beneits Guide
Flexible
Spending You have the option to contribute to a Healthcare and Dependent Care
Accounts Flexible Spending Accounts (FSAs). ADP administers this beneit.
The Internal Revenue Service set up FSAs as a means to provide a tax
break to employees. As an employee, you can set aside a portion of
your pre-tax salary in an account, and that money is deducted from
your paycheck over the course of the year. The amount you contribute
to the FSA is not subject to Social Security (FICA), federal, state, or
local income taxes—effectively adjusting your annual taxable salary.
The taxes you pay each paycheck and collectively each year can be
reduced signiicantly, depending on your tax bracket. As a result of the
personal tax savings you realize, your spendable income will increase.
Healthcare FSA
The Healthcare FSA lets you pay for certain IRS approved medical,
prescription drug, dental, and vision care expenses not covered by your
insurance plan with pre-tax dollars. For example, cash that you now
spend on deductibles, copayments, or other out-of-pocket medical
expenses can instead be placed in the Healthcare FSA to pay for these
expenses. The maximum contribution to the Healthcare FSA is
$2,550 for 2015.
Please remember to plan carefully when determining your contribution
amount. Because the Healthcare FSA has tax beneits, the IRS places
guidelines on how long you have to spend the money. Any money left
in your account at the end of the plan year cannot be rolled over to the
next year or paid out to you. Our plan allows an extension of up to 2½
months into the following plan year, called the grace period, to help
you spend your Healthcare FSA funds. Any excess amount after the
grace period is forfeited to the plan.
8
Beneits Guide
Flexible
Spending You have the option to contribute to a Healthcare and Dependent Care
Accounts Flexible Spending Accounts (FSAs). ADP administers this beneit.
The Internal Revenue Service set up FSAs as a means to provide a tax
break to employees. As an employee, you can set aside a portion of
your pre-tax salary in an account, and that money is deducted from
your paycheck over the course of the year. The amount you contribute
to the FSA is not subject to Social Security (FICA), federal, state, or
local income taxes—effectively adjusting your annual taxable salary.
The taxes you pay each paycheck and collectively each year can be
reduced signiicantly, depending on your tax bracket. As a result of the
personal tax savings you realize, your spendable income will increase.
Healthcare FSA
The Healthcare FSA lets you pay for certain IRS approved medical,
prescription drug, dental, and vision care expenses not covered by your
insurance plan with pre-tax dollars. For example, cash that you now
spend on deductibles, copayments, or other out-of-pocket medical
expenses can instead be placed in the Healthcare FSA to pay for these
expenses. The maximum contribution to the Healthcare FSA is
$2,550 for 2015.
Please remember to plan carefully when determining your contribution
amount. Because the Healthcare FSA has tax beneits, the IRS places
guidelines on how long you have to spend the money. Any money left
in your account at the end of the plan year cannot be rolled over to the
next year or paid out to you. Our plan allows an extension of up to 2½
months into the following plan year, called the grace period, to help
you spend your Healthcare FSA funds. Any excess amount after the
grace period is forfeited to the plan.
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