A fresh new calendar offers a lot of possibilities. There’s those pesky resolutions – to lose weight, get in shape, save more money – but did you know you can alter your fashion and financial profile at the same time? With just a few small tweaks, your paycheck can reap some big savings – especially when it comes to some prescription eyewear.
Time to go from this . . .
. . . to this!
First, you need to put aside some money. Not just any money: money you can earn and spend tax-free. That’s Discount Number One. If you don’t think taxes add up, realize that a single person in California hands over more than twenty-five per cent of their earnings to federal and state taxes. The government created only a few programs that allow you to put money aside directly from your paycheck before the taxmeister ever sees it.
One of the most popular tax-savings programs is the 401(k). For those of you who think it sounds like something you put under the hood of a Chevy, a simple introduction is in order. Employee contributions – sometimes matched by the employer – are deposited in a special tax deferred account and invested in a variety of financial instruments, usually mutual funds. Over time, it can build significant retirement savings.
The 401(k) was introduced into the Internal Revenue Code in 1978 – the same year the double-album soundtrack for Saturday Night Fever was topping the charts – along with its lesser-known cousin the Flexible Spending Account or FSA. Basically, it was an interest-free savings account that was used to pay for medical expenses. Like the 401(k), it’s undergone some recent improvements that make it a more useful financial tool than ever.
(From top to bottom) Barry, Robin and Maurice Gibb AKA the BeeGees, in 1978, the year the FSA was created. They most likely were not aware of this fact at the time.
This Isn’t Your Parent’s Flexible Spending Account
An FSA is similar to a 401(k) in the sense that it is funded by regular contributions from your paycheck and is exempt from the taxes that bite deepest into your take-home. Until recently those contributions had to be carefully managed or you would default everything you put in by the end of the year. Poof! Hundreds of dollars could be gone. It was “use it or lose it” in the worst kind of way. It was this liability that kept the FSA from attaining the massive popularity that the 401(k) achieved over the last four decades.
But since 2013, the Patient Protection and Affordable Care Act now allows individuals to carry over up to $500 into the New Year while limiting contributions to $2500. (Check with your employer for details.) A debit card called a Flex Card is the easiest way to access funds, and most major pharmacies and medical suppliers are familiar with them. (Note: keep all your receipts, as they will note what you used FSA funds for.)
Go from this . . .
. . . to this!
The funds from an FSA can only be used on medical expenses not covered under an individual’s medical insurance policy, such as copayments, deductibles and medical supplies. A good rule of thumb is to use the same guidelines the IRS uses for the medical tax deduction. (You can get a copy of IRS Publication 502, which details allowable medical and dental expenses.) You will see eyeglasses in bold. Bingo!
Out with the Old You, in with the New You
If you wear eyeglasses, a new pair is the best way to let everyone know that you’ve changed your look. Your FSA can pay not only for an exam, but frames and lenses. The New Year is the perfect time to freshen up your personal as well as professional image. Eye Buy Direct offers discounted frames and lenses in a variety of styles to suit every mood or season.
Want to save even more money? Check out EyeBuyDirect’s coupon codes for the latest deals. (That is Discount Number Two. No, I hadn’t forgotten about it.) You can get money off your total, free shipping and much more. With your FSA, you’re paying in pre-tax dollars so be sure to check out their on sale section! All orders over $99 get free shipping and orders are processed within fifteen days.
Here’s looking at you, 2015!