There are at least two ways you can save tax money with LASIK at Toledo LASIK & Cataract:
- By deducting LASIK as a medical expense
- With your company’s Flex Spending Plan.
If your medical expenses reach 7.5% of your income in any given year, the price of your IntraLASIK can be deducted for tax purposes. In May 2003, the IRS confirmed that laser vision correction indeed qualified as a medical expense for this purpose. Most people, however, end up not reaching the 7.5% threshold. Therefore, they turn to another popular program: Flex Spending.
FAQ’s (Frequently Asked Questions) on Flexible Spending
Q. What is a Flexible Spending Account (FSA)?
A. Flexible Spending Account (FSA), (also called flex plan, reimbursement account, Flex 125, Tax Saving Plan, Medical Spending Account, a Section 125, or a Cafeteria Plan), is an employer-sponsored benefit that allows you to pay for eligible medical expenses on a pre-tax basis. If you expect to incur medical expenses that won’t be reimbursed by your regular health insurance plan, you can take advantage of your employer’s FSA, if one is offered.
Q. What is the benefit of an FSA?
A. FSA saves you money by reducing your income taxes. The contributions you make to a Flexible Spending Account are deducted from your pay BEFORE your Federal, State, or Social Security Taxes are calculated and the contributions are never reported to the IRS. The benefit is that you decrease your taxable income and increase your spendable income which can save hundreds or even thousands of dollars a year.
Q. How does Flexible Spending Account (FSA) work?
A. At the beginning of the plan year (which usually starts January 1st), your employer asks you how much money you want to contribute for the year (there are limits) into your Flexible Spending Account. You have only one opportunity a year to enroll, unless you have a qualified “family status change,” such as marriage, birth, divorce, or loss of a spouse’s insurance coverage. The amount you designate for the year is taken out of your paycheck in equal installments each pay period and placed in a special account by your employer. As you incur medical expenses that are not fully covered by your insurance, you submit a copy of the Explanation of Benefits or the provider’s invoice and proof of payment to the plan administrator, who will then issue you a reimbursement check.
Q. What expenses are eligible?
A. Any expense that is considered a deductible medical expense by the IRS and is not reimbursed through your insurance can be reimbursed through the FSA. These include most elective surgeries, laser vision correction, deductibles, eyeglasses, and prescription drug co-payments.
Q. Am I eligible for LASIK?
A. Toledo LASIK & Cataract recommends that you schedule a complimentary consultation to help you determine if you’re a good candidate for laser eye surgery (LASIK). Our medical staff carefully screen prospective patients as to whether they are a good candidate for LASIK. Treating each patient with respect to their unique requirements and vision correction needs begins with a thorough eye exam.
If you have a Flexible Spending Account (FSA), 2022 may be your only chance to pay for your entire LASIK procedure using pre-tax dollars.
According to the IRS, Laser eye surgery is a qualified expense for use of FSA funds. In previous years, patients were able to pay for part of their LASIK procedure using pre-tax dollars set aside in their flexible spending account. But, because of contribution limits established by the IRS, most patients were not able to pay the entire fee for the correction of both eyes. More recently, in light of the financial stress of the pandemic, the government put some temporary changes in place to benefit employees with FSAs. One of the temporary changes that were put in place was the Consolidated Appropriations Act 2021.
The Consolidated Appropriations Act, 2021 permits employers to amend their flexible spending account plans to help participants avoid forfeiting unused amounts for the 2020 and 2021 plan years. The federal government gave employers the opportunity to extend the deadlines for workers to use up their flexible spending dollars. Additionally, employers can also allow employee accounts to be rolled over into 2022. Because of the Consolidated Appropriations Act 2021, you may be able to cover the cost of your entire procedure with your accumulated funds.
FSA contribution limits
2021 – $2750
2022 – $2850
If your employer elected to allow you to carry over your full amount, you may have as much as $5600 pretax dollars available for your use in paying for an elective procedure such as LASIK, PRK, or SMILE. ($5600 assumes that you have not used any of your FSA dollars in 2021 and that you elected to put aside the maximum amount allowable.). The average cost of LASIK in the United States is approximately $4200 in the United States per the American Refractive Surgery Council.
If you have a Flexible Spending Account, speak with your benefits manager to get the specifics about your benefits and how this rule exemption affects your plan.