FSAs are a fantastic way to pay for dependent care and health care expenses tax free – a likely savings on these expenses of 25%.
How FSAs Work
- At the beginning of the plan year, you estimate how much you will spend over the next 12-15 months on either health care or dependent care up to a maximum of $5000 for each ($10,000 total) and tell this amount to your employer during your benefits enrollment. Once set, it can’t be changed through the year except for specified life events (marriage, birth of a child, etc.).
- This amount will then be divided equally by the number of paychecks you receive in a year and is deducted from your check before taxes. The money is ‘deposited’ into a type of savings account – more on this later – for your use.
- You spend money on eligible items and either pay with a plan provided debit card that takes the money directly out of the account or you pay with your own funds and request reimbursement from the account.
The benefit here is the before tax statement – let’s take an example assuming you fall in the 25% tax bracket as most residents and fellows will. Read more…
matt New Resident Guide benefits
Your new residency, fellowship, or ‘real job’ programs, if they haven’t already, are probably beginning to mail out information about the benefits you will receive as their employee. There are often several choices to be made and making the wrong ones may force you to pay for services you’ll never use. Over the next couple of posts, I want to go through what your choices are and how you can make the best decisions to both take advantage of what your new program offers without overpaying.
Types of Health Insurance
The most discussed benefit of all these days is without a doubt health insurance. Being a physician, you understand how expensive procedures can be and why the need for insurance is great. You should also know from previous posts that over insuring isn’t always the best idea and can cost you money unnecessarily.
Consumer Driven Health Plans (CHDP) – HSAs and HRAs
These plans are part of a new wave of insurance plans brought about with the assumption that the free market works and educated consumers (patients) will make rational choices about their healthcare – opinions that I heartily agree with. Read more…
matt New Resident Guide benefits, Insurance
Since many of you will be moving at the end of June / early July, now is the time to start paring down your belongings and figuring out what means enough to you that it’s worth hauling to a new place. Most of the advice out there says you should go through your place room by room and separate everything in to one of three piles – keep, trash, or donate/sell.
Keep
The keep pile is pretty self explanatory. These are the things that you use everyday or help you somehow better your life on a frequent basis. For example, pots and pans that let you cook or your laptop you use for your entertainment. These aren’t really needs, but they help you out every day. Read more…
matt Taxes charity, decluttering, moving, Taxes
After reading our post detailing several tips for moving to start your new medical position, Bill at FP Pad suggested that I write a post talking about the potential for deducting the expenses you incur during your move on your taxes. Reducing taxes for something you have to do anyway? We’re all over that!
Why are Moving Expenses Deductible?
One of the most effective ways to get people to do something is through the use money – especially in the capitalist society in which we live. The government understands this and encourages its citizens to perform what it considers to be good deeds, for lack of a better word, that will benefit society through the use of taxes – either penalties or breaks. Here, the government is encouraging you to move to start a new position by giving you a break on the amount of money you have to spend in order to relocate for a new, assumedly better, position which they will then be able to tax and recover the money they let you have. Fun stuff, this whole taxation thing!
Are You Eligibile to Deduct Your Moving Expenses?
The following items are considered: Read more…
matt Taxes moving, relocation, Taxes
It’s getting close to July and that means that many of you will be moving to begin your new residency, fellowship, or real-life job – Congratulations! With that next step, though, comes the process of moving all your earthly belongings on to your new residence. Andrea and I are performing a pre-wedding move right now, so I thought I’d give you some tips to get you prepared for yours! Read more…
matt Personal Finance moving, relocation
