FSA

Taxpayers who utilize Flexible Spending Accounts (FSAs) are well aware of the 'use-it-or-lose-it' rule regarding expending pre-tax money set aside for medical expenses.  Previously, any amounts unused by year-end are forfitted. Under Internal Revenue Code Section 125(j) as added in the Affordable Care Act (also known as 'Obamacare'), taxpayer are now eligible to roll-over up to $500 of unused funds to a following plan year.  The roll-over does not affect the $2,500 contribution maximum in the subsequent year. Sponsors (employers) must amend their plan to take into account the new elective changes. Aaron's Take: The end-of-year rush to spend FSA money [...]