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Health Care Spending Account Worksheets

February 28, 2002
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Related Topics: Benefit Design and Communication, Finance/Taxes, Health and Wellness, Featured Article, Compensation
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SavingsWorksheet
 WithSpending AccountWithoutSpending Account
Annual Income$$
Spending Account Contribution--
Taxable Income==
Est. Federal Income Tax--
Social Security Tax--
Health Care Expenses--
Net Pay==

The below worksheet will help you to think about health care expenses for thecoming year and to estimate the amount you should put in your health carespending account. As you think about what your expenses might be, it would behelpful to review your health care expenses for recent years.

Do you tend to have certain recurring, predictable expenses? Also considerany anticipated changes that might affect your expenses during this year, suchas marriage or a new baby. The following list will give you some ideas about thetypes of out-of-pocket expenses you might have that could be reimbursed withtax-free dollars from your health care spending account. Remember, theseexpenses must not be payable by any other plan.

ExpensesWorksheet (expensesnot covered by another plan)
Deductible$
Co-insurance$
Dentalwork$
Routinehealth examinations$
Chargesin excess of "reasonable and customary"$
Routineeye examinations, eyeglasses, contact lenses$
Hearingaids$
Othereligible expenses$
__________________$
__________________$
__________________$
__________________$
Total:=

Sample Health Care Situation
Ellen's situation: Ellen is a single parent with one dependent child. Sheexpects to earn $30,000 in taxable income this year. Ellen knows that she andher daughter are likely to incur certain health care expenses each year thatwon't be covered by another plan. She wonders whether reimbursing these expenseswith a health care spending account would help her save money on taxes.

Ellen'sExpenses(expensesnot covered by another plan)
Deductible$200
Co-insurance$180
Orthodontiafor herself$1200
Routinehealth examinations$80
Eyeglassesfor daughter$20
Total:=$1860

The following shows what Ellen's taxsavings will be:

Ellen'sSavings
 WithSpending AccountWithoutSpending Account
Annual Income$30000$30000
Spending Account Contribution-1860- 0
Taxable Income= $28140= $30000
Est. Federal Income Tax- 4221- 4662
Social Security Tax- 2153- 2295
Health Care Expenses- 0- 1860
Net Pay= $21766= $21183
TaxSavings w/ Spending Account = $583

Reprinted with permission from "Exhibit Book of Benefit CommunicationPrograms," Watson Wyatt Data Services, 2000. For more information, visit www.wwdssurveys.com or call (201) 843-1177 and ask for Customer Service.

The information contained here is intended to provide useful information onthe topic covered, but should not be construed as legal advice or a legalopinion. 

Workforce Online, March 2002

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