TaxSaver Flexible Benefits Plan

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TaxSaver Flexible Benefits Plan
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Tax Saver

• Two Levels of Participation
• Premium Only
• Spending Accounts

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Premium Only

• Allows employees to shelter premiums for
• Health Insurance
• Group Benefits Life Ins.
• Dental Insurance
• Vision Insurance
• Excludes Dependent Premium

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How do I save?
With FSA No FSA
Monthly Gross 2,000.00 2,000.00
Pre-Tax Premium 482.88 482.88
Taxable Income 1,517.12 2,000.00
Taxes (21.5) 326.18 400.00
Monthly Savings 103.82 0.00
Annual Savings 1,245.84 0.00
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Stipulations

• IRS rules state that you will not be allowed to
  make changes to your tax sheltered insurances
  unless you incur a change in status or,
• During the Annual Enrollment Period.

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Status Change Examples

• Change in Marital Status Marriage, Divorce,
  Legal Separation, Annulment
• Change in the number of tax dependents Birth,
  Adoption, Death
• Change in employment status of employee, spouse,
  or dependents Termination, LWOP, FMLA, F/T to
  P/T

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When May I Enroll?

• During Annual Enrollment or
• Within 30 days of a change in family status

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Premium Only

• No Cost to Participate
• No Reenrollment

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Spending Accounts

• Health Care
• Dependent Care

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HC Eligible Expenses

• Medical deductibles and co-payments
• (office visits, physicals, etc.)
• Dental expenses
• (check-ups, cleanings, braces)
• Vision expenses
• (exams, glasses, contacts)
• Prescription drugs

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How Do I Save?
With HC Acct W/out HC Acct
Annual Pay 30,000.00 30,000.00
Spending Account Contribution 2,000.00 0.00
Taxes Paid (21.5) 6,020.00 6,450.00
After Tax Expenses 0 2,000.00
Income 21,980.00 21,550.00
Savings 430.00
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HC Acct vs. Tax Deduct

• You may only claim medical expenses that are in
  excess of 7.5 of your gross income and you are
  required to itemize to take the deduction (7.5
  of a 30,000 is 2,250).
• The minimum for the HC account is 100 per year
  so you can reap the tax benefits without having
  to contribute a large amount of money.

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HC Acct and Insurance

• Prescriptions
• Deductibles
• Co-Pays
• Co-Insurances

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Spending Accounts
Dependent Care Cost of care for children
elderly adults to enable you to work.
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DC Eligible Expenses

• Day-Care for Pre-K age or under.
• Before/After School care for children up to
  age 12.
• Summer Camp (up to age 12).
• Care for an elderly adult.

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DC Example
With DC Acct W/out DC Acct
Annual Pay 30,000.00 30,000.00
Spending Account Contributions 5,000.00 0.00
Taxes Paid (21.5) 5,375.00 6,450.00
After Tax Expenses 0 5,000.00
Income 19,625.00 18,550.00
Savings 1,075.00
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DC Acct vs. Tax Deduct
If you claim the DC expenses as a tax deduct, the
maximum expenses allowed is 3,000.00 for one
dependent and 6,000.00 for two or more.
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DC Acct vs. Tax Deduct
Gross Annual Salary Credit of expenses up to max. Maximum 1 dep / 2 or more
15,000.00 or less 35 1050.00 / 2100.00
30,000.00 27 810.00 / 1620.00
43,001.00 20 600.00 / 1200.00
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Example

• If your gross annual income is 30,000.00 and you
  have one child in daycare with annual expenses of
  5,000.00 your savings, under the tax saver plan,
  would equal 1,075.00 and your savings under the
  Tax Credit would be 810.00.

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Spending Acctount Fees
5.10 per month Must reenroll each
year
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Annual Contribution
Annual Maximum Health Care Acct. - 2,500
Max Dependent Care Acct. - 5,000 Max Annual
Minimum HC and/or DC acct. is 100.00.
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Flexibility

• Debit Card
• Change in Family Status
• Grace Period

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Use It or Lose It

• Plan members should estimate their expenses
  carefully because remaining funds at the end of
  the plan year are forfeited.

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Questions?
For more information, visit our website at
www.lsuagcenter.com