The example below shows how a participant in FSA saved $602 in taxes in one year.
|
|
Without FSA |
With FSA |
FSA Benefit |
| Gross Income | $45,000 | $45,000 | |
|
Expenses run through FSA |
0 |
($2,000) |
|
| Taxable Income | $45,000 | $43,000 | |
| Federal Tax* | (3,563) | (3,238) | 325 |
| State Income Tax* | (1,848) | (1,723) | 125 |
| FICA | (3,442) | (3,290) | 152 |
| Income After Taxes | $36,147 | $34,749 | |
| Expenses not run through FSA | (2,000) | 0 | |
| Your Spendable Income | $34,147 | $34,749 | $602 |
| This employee could reduce taxes by $602 by using the Flexible Spending benefit! | |||
*Assumes married with 2 allowances.