A Medical FSA Plan allows you to pay for eligible out-of-pocket medical expenses with pre-tax dollars. The IRS annual maximum contribution is $2,650 (in 2018); however, your employer may elect a lesser amount. Eligible expenses may include deductibles, copayments, or medical costs that are generally deductible on your annual tax return. Examples include contact lenses and solution, eye exams, dental services, orthodontia, chiropractors and acupuncture. For additional details, please refer to IRS Publication 502.
The Dependent Care FSA Plan allows you to pay for eligible out-of-pocket daycare expenses with pre-tax dollars. The IRS annual maximum deferral is $5,000, or $2,500 if married & filing separately. Qualified expenses include costs to care for a tax-dependent child under 13 living with you, or a tax-dependent parent, spouse or adult child living with you and incapable of caring for themselves. Examples of qualified expenses include after school day care, registration costs and preschools and home-based daycare facilities. Overnight camps, music lessons, foreign language and gymnastics classes are examples of ineligible expenses. Dependent Care providers must furnish a federal tax ID or social security number. For additional details, please refer to IRS Publication 503