#2023 contribution limits for fsa

[health-investment]

What Are Cobra Benefits?

Having health insurance is important. Making sure your insurance doesn’t lapse is important too. In the instance, your health insurance lapses, you could suffer several injuries or issues that could end up costing you thousands of dollars. To help prevent this, COBRA (Consolidated Omnibus Budget Reconciliation Act) helps employees who lose their benefits to continue their benefits for a limited period. This can help workers and their families greatly. Let’s take a look at some of the COBRA insurance benefits and what that could mean to you and your family.

COBRA Insurance Benefits

One of the main COBRA benefits is the provision of health benefits in the instance an employee involuntarily loses their job, has their hours reduced, goes through a divorce, transitions to another job, or experiences a change in other major life events. It should be noted that employees may need to pay their entire premium and possibly up to 102 percent of costs associated with their plan. However, this is better than not being covered at all. COBRA provides all the necessary information to allow workers and their family to elect their continuation coverage.

In Addition to COBRA

Health savings accounts work with COBRA to save you additional money on your healthcare needs. HSAs are owned by the employee. After termination, an employee can still use their account balance to pay for healthcare expenses.

Set Up an HSA Today

Healthcare can be expensive, and you don’t want to be without coverage in the instance you suffer an injury or illness. In the event you lose your job or need other forms of safeguarding, an existing HSA can help you greatly. You don’t want to leave your healthcare needs to change. Contact Lively today to enroll in an HSA.

Read a similar article about healthcare and taxes here at this page.

[alishaboetaxplanningexpert]

Year-End Tax Planning Strategies For Individuals

Year-end tax planning is a crucial process for individuals to minimize their tax liabilities and maximize their financial efficiency. As the end of the year approaches, it’s essential to review your financial situation and implement strategies that can help reduce the amount of taxes owed. Here are some key tax planning strategies to consider:

Maximize Retirement Contributions

One of the most effective ways to reduce taxable income is to contribute to retirement accounts. Contributions to traditional IRAs and 401(k) plans are typically tax-deductible, reducing your taxable income for the year. For 2023, the contribution limits are $22,500 for 401(k) plans (with an additional $7,500 catch-up contribution if you’re 50 or older) and $6,500 for IRAs (with a $1,000 catch-up for those 50 or older).

Harvest Tax Losses

Tax-loss harvesting involves selling investments that have declined in value to offset capital gains from other investments. This strategy can help lower your taxable income. For instance, if you have $5,000 in capital gains but $3,000 in capital losses, your net capital gain is only $2,000. Additionally, if your losses exceed your gains, you can deduct up to $3,000 ($1,500 if married filing separately) against other income, with any remaining losses carried forward to future years.

Review and Adjust Withholding

Ensuring the correct amount of tax is withheld from your paycheck can prevent large tax bills or penalties at tax time. Use the IRS withholding calculator to check if you need to adjust your W-4 form to reflect changes in your income, deductions, or credits.

Utilize Tax-Advantaged Accounts

Consider contributing to Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs). Contributions to HSAs are tax-deductible and withdrawals for qualified medical expenses are tax-free. For 2023, the contribution limit is $3,850 for individuals and $7,750 for families, with an additional $1,000 catch-up contribution for those 55 or older. FSAs allow you to set aside pre-tax dollars for medical expenses, though funds typically must be used within the plan year.

Make Charitable Contributions

Donating to qualified charities can provide a tax deduction if you itemize deductions. Ensure you keep receipts and records of your donations. For large donations, consider donating appreciated assets like stocks, which can help avoid capital gains taxes while providing a deduction for the full market value.

Consider Itemizing Deductions

Review your expenses to determine if itemizing deductions would be more beneficial than taking the standard deduction. Common itemized deductions include mortgage interest, state and local taxes (capped at $10,000), and medical expenses exceeding 7.5% of adjusted gross income.

Plan for Education Expenses

Take advantage of tax credits for education expenses, such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC). These credits can help offset the cost of higher education and reduce your tax bill.

Evaluate Investment Portfolio

Review your investment portfolio and consider rebalancing it to align with your financial goals and risk tolerance. This may involve selling off certain investments and purchasing others, which can have tax implications.

Prepay Deductible Expenses

If you expect your income to be higher next year or anticipate changes in tax laws, consider prepaying deductible expenses like property taxes or medical bills. This can help maximize deductions in the current tax year.

Consult a Tax Professional

Tax laws can be complex and subject to change. Consulting with a tax professional offering tax planning for business owners in Mayfield Heights OH can provide personalized advice and ensure you’re taking advantage of all available tax-saving opportunities.

By implementing these strategies, individuals can better manage their tax liabilities, optimize their financial situation, and ensure they are well-prepared for the upcoming tax season. Effective tax planning requires careful consideration and timely action, so start reviewing your options well before the year ends.

[pmopbiz]

Inflation Adjustments for 2023

The IRS released its inflation adjustments for the 2023 tax year 👀 Here are the major changes to note:

✅ Higher tax brackets – find your tax bracket here: https://news.bloombergtax.com/financial-accounting/your-first-look-at-2023-tax-brackets-deductions-and-credits ✅ Larger standard deduction for single filers and married couples filing jointly ✅ The estate tax exemption increases for single and joint filers ✅ Higher contribution limits for retirement, FSAs, and HSAs

I know taxes can be confusing, so don’t hesitate to reach out if you have questions! Share this post to help people in your circle ➡️

[don-lichterman]

2023 FSA and HSA Contribution Limits Help Make Paying for LASIK Tax-Free, According to Refractive Surgery Council

2023 FSA and HSA Contribution Limits Help Make Paying for LASIK Tax-Free, According to Refractive Surgery Council

The Refractive Surgery Council helps consumers make informed choices about their vision correction options. DALLAS, TX, UNITED STATES, October 26, 2022 /EINPresswire.com/ — The U.S. Internal Revenue Service announced this month new 2023 contribution limits to pre-tax savings accounts, including Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA) with increases to both over 2022…

[craigbrownphd-blog-blog]

2023 Health FSA Contribution Cap Rises to $3,050

Employees in 2023 can contribute up to $3,050 to their health care flexible spending accounts (FSAs), pretax, through payroll deduction—a $200 increase from 2022—the IRS announced. The maximum carryover amount rises to $610, up from $570. Tax-exclusion limits for commuting benefits and adoption assistance programs are also rising. https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/2023-fsa-contribution-cap-and-other-colas.aspx?utm_source=dlvr.it&utm_medium=tumblr

[christophergill8]

Senate mostly follows House plans to kill Obamacare taxes

Here's a look at eight Affordable Care Act taxes that Republicans in both the House and Senate agree on eliminating.

Senate Minority Leader Sen. Chuck Schumer (D-New York), joined by Sen. Patty Murray (D-Washington) and a mostly hidden Sen. Ron Wyden (D-Oregon) held a press conference today to denounce as "meaner" their GOP Senate colleagues' version of health care reform to replace Obamacare. (Photo courtesy Sen. Schumer's Twitter account)

The Senate today finally revealed its version of Obamacare repeal and replace, dubbed the Better Care Reconciliation Act of 2017 or BCRA.

The 142-page document, which Senate leadership is describing as a discussion draft, is a rewrite of the House's American Health Care Act, or AHCA.

Since it just was released this morning, folks are still poring over the Senate document to see where it differs from the House bill and whether it is, as the president and Democrat opponents have charged, mean or meaner than the House bill.

House and Senate agree on ending Obamacare taxes: As a tax geek/tax blogger, I'm focusing on the tax provisions of the Republican health care effort. In this regard, the Senate and House are pretty much in agreement.

Both chambers really, really hate the taxes created seven years ago to fund Obama's signature Patient Protection and Affordable Care Act, generally referred to in official circles as the ACA.

So, like the House bill that squeaked through that chamber May 4 by a 217-213 vote with 20 Republicans voting against their party's legislation (I guess they didn't go to the White House Rose Garden post-passage party), the Senate's version would repeal several Obamacare taxes.

Below are eight ACA taxes to be eliminated and how the House and now Senate suggest their demises.

Net investment income tax, or NIIT — This 3.8 percent surtax applies to individual taxpayers making more than $200,000 and married couples making more than $250,000. Those tax triggers are not adjusted annually for inflation, which means as individuals' adjusted gross incomes' increase, they could be caught by the NIIT. The Senate bill follows the House measure and would end this investment tax retroactively to the start of 2017.

Additional 0.9 percent payroll tax — This fractional payroll tax is in addition to the 1.45 percent already collected from workers' wages to go toward Medicare and also kicks in at the same $200,000/$250,000 income levels as the NIIT. Under the Senate's health care measure, it would stay in place until 2023, meaning that higher income earners would see 2.35 percent of their pay above the threshold amount withheld for the next six years. That delayed repeal date is the same as in the House version.

Medicine Cabinet Tax — This moniker was given to the provision that limits the use of money from flexible spending accounts (FSAs) to pay for over-the-counter (OTC) medicines. Since 2011, the ACA has required FSA etc. owners to get a doctor's prescription for the OTC meds in order to use their tax-advantaged funds. Both the House and Senate say that option will be reinstated. The House wants FSA money for OTC drugs available in 2017. The Senate pushes the effective date to 2018.

Flexible Spending Account Cap — FSAs took another hit in 2013. That year the amount of money you could put into these accounts, which are added to via payroll deposits before any taxes are calculated, was capped at $2,500. Previously there was no limit on how much a worker could put into an FSA, but most companies used the $5,000 that statutorily applies to the sister dependent care spending account. Granted, not a lot of folks put five grand into their FSAs. But still, the policy irked folks. At least the limit is adjusted annually for inflation. For 2016 it was $2,550. This year, it's bumped up to $2,600. Again, both Representatives and Senators want to repeal the FSA contribution limit beginning in 2018.

Medical Deduction Threshold — 2013 was a big year for Obamacare taxes. That also was the year that the threshold many folks had to exceed in order to claim an itemized deduction for medical and dental expenses went up from 7.5 percent of adjusted gross income (AGI) to 10 percent. This hike means that folks younger than 65 had to have more medical costs in order to get the Schedule A deduction. Taxpayers 65 and older still got the 7.5 percent cutoff, but that changed this year. For 2017, all taxpayers must meet/exceed the 10 percent AGI threshold. Both the House and Senate would lower the AGI threshold for all taxpayers, regardless of age, retroactively to the start of the 2017 tax year. But where the House cuts it to medical costs exceeding 5.8 percent of income, the Senate goes back to the AGI trigger of 7.5 percent.

Shared Responsibility Tax — This tax was created as a way to get us to comply with the ACA's individual mandate; that's the requirement that we all have minimal essential coverage during the full tax year. The tax penalty for noncompliance was low enough in the beginning that many folks found it more cost-efficient to pay the penalty rather than purchase insurance. The penalty, however, has increased each year. On 2016 tax returns filed this year, the maximum is $695 per uninsured month. It stays at that level thanks to low inflation for the 2017 tax year. Both the House and Senate bills repeal the individual mandate and associated tax. The effective date is retroactive to the beginning of 2016.

Cadillac Plans Tax — Obamacare imposes a 40 percent excise tax on high-cost, generous employer-sponsored health coverage, also known as Cadillac plans. Under current law, the tax will go into effect in 2020. The House bill changes the effective date of the tax to Jan. 1, 2026. The Senate bill also suspends the Cadillac tax through 2025.

Tanning Tax — House would repeal it effective July 1. The Senate, however, would make folks rely longer on the actual sun's rays, not giving folks a fake bronzing break until the new fiscal year starts on Oct. 1.

Fluid tax dates: Of course, as some of those who helped craft the Senate health care measure note, it's a starting point.

That means that although Senate Majority Leader Mitch McConnell (R-Kentucky) would like to hold a vote next week, some of the provisions in today's document could change before or during the limited debate planned before that vote.

That could include changes are particularly possibly when it comes to the tax provisions' effective dates. To what extent remains to be seen, since the exact ACA tax repeal dates will likely depend on how much money is needed to cover other associated repeal and replace costs.

And the dates of the tax changes definitely could change if the Senate bill clears that chamber and heads to conference with the House.  

Awaiting fiscal analysis: The dollar details of the Senate rewrite of the House bill won't be known until next week. That's when the nonpartisan Congressional Budget Office (CBO), with assistance from the Congressional Joint Committee on Taxation, says it will release its analysis and cost estimate of the bill

In analyzing the House's version of the American Health Care Act, the CBO found that 23 million more Americans would become uninsured by 2026 under the GOP replacement plan for Obamacare. That's part of the reason that the House's AHCA is quite unpopular across the United States.

Will the Senate's version face a similar fate? The Republican bill already is facing blow-back not only from Democratic opponents, but also some in the medical community and many in its own party.

More conservative GOP lawmakers in the Upper Chamber have come out against the bill in general and four Republican Senators have specifically said they won't vote for or are leaning against voting for the bill. That's not encouraging since a defection of only three GOP Senators would doom the bill. 

Looks like McConnell and crew have some arm twisting and deal making ahead of them.

You also might find these items of interest:

4 Obamacare taxes the GOP vows to end

High-deductible health plan and HSA inflation adjustments for 2018 announced by IRS

GOP gets tax reform head start by killing Obamacare taxes in its replacement health care plan

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  from Tax News By Christopher http://www.dontmesswithtaxes.com/2017/06/senate-mostly-follows-house-plans-to-kill-obamcare-taxes.html

[health-investment]

What Can I Use My HRA Debit Card On?

A health reimbursement account (HRA) is a unique benefit many employers offer. They're entirely employer-sponsored and designed to reimburse you with a portion of out-of-pocket qualifying medical expenses. They differ from flexible spending accounts (FSAs) and health savings accounts (HSAs). HRAs are not portable and can't move with you to a different job. Furthermore, most HRAs require you to pay for expenses upfront before working with an HRA administrator to receive reimbursement.

The qualified medical expenses differ, too. With an HSA or FSA, you can typically buy over-the-counter products. But with an HRA, you're limited to costs like deductibles, prescription drugs, coinsurance, copayments and more. It's important to familiarize yourself with your plan to understand what's covered and what's not.

How an HRA Works

Your employer will fund the HRA entirely, designating a specific dollar amount credited to your account annually. When you pay for a qualified expense, you must do so upfront before going to your HRA administrator for reimbursement.

The administrator acts as the go-between for employers and employees. An administrator will handle the logistics, take care of compliance, store documents, provide reimbursements, etc. In the past, administrators were people you had to talk to. However, modern administrators are software platforms that easily manage your HRA and request reimbursements.

HRA Debit Cards

One of the newer innovations in HRA management is debit cards. Some HRA plans come with a debit card that provides easy access to the funds in your account without filling out forms or providing any additional documentation.

You can use your debit card instead of paying for expenses out of pocket. Depending on the situation, you may have to provide additional details to prove it was an eligible expense. If you accidentally pay for something that's not eligible, you must repay that amount.

You can use your HRA debit card for any eligible expense covered by your plan. That includes office copays, prescription medications, hospital deductibles, etc. Using these debit cards is easy. They don't come with a PIN. When using the card, all you have to do is hit the "credit" option at the terminal.

Read a similar article about FSA contributions here at this page.