How much does a medical flexible spending account really save you?7/31/2019
Under the new tax law, it is difficult for many people to have enough medical costs to get a tax deduction on their
income tax returns. Utilizing a medical flexible spending account gives employees the opportunity to get a tax
deduction on medical costs that they wouldn’t otherwise normally get to take.
For 2019, the IRS allows employees to designate up to $2,700 of wages to be tax free to pay for qualified medical costs when employers have a qualified cafeteria plan set up. Cafeteria plans are a tax savings win/win for both the
employer and the employee. Employers save roughly $206.55 per employee in Social Security and Medicare taxes.
Employees save roughly $675 in Social Security, Medicare, federal and state income taxes. Eligible medical costs include copays, deductibles, prescriptions, doctors, dental, vision, lab services, medical devices, etc.