taxsaver flexible benefits plan. tax saver two levels of participation: $ premium only $ spending...

TaxSaver Flexible Benefits Plan

Tax Saver

Two Levels of Participation:

$ Premium Only

$ Spending Accounts

Premium OnlyAllows employees to shelter premiums for:$ Health Insurance$ Group Benefits Life Ins.*$ Dental Insurance$ Vision Insurance*Excludes Dependent Premium

With FSA No FSAMonthly Gross $2,000.00 $2,000.00Pre-Tax Premium $482.88 $482.88Taxable Income $1,517.12 $2,000.00Taxes (21.5%) $326.18 400.00Monthly Savings $103.82 $0.00Annual Savings $1,245.84 $0.00

How do I save?

Stipulations:$ IRS rules state that you will not be

allowed to make changes to your tax sheltered insurances unless you incur a change in status or,

$ During the Annual Enrollment Period.

Status Change Examples:$ Change in Marital Status – Marriage,

Divorce, Legal Separation, Annulment$ Change in the number of tax dependents

– Birth, Adoption, Death$ Change in employment status of

employee, spouse, or dependents – Termination, LWOP, FMLA, F/T to P/T

When May I Enroll?

$ During Annual Enrollment or

$ Within 30 days of a change in family status

Premium Only

$No Cost to Participate

$No Reenrollment

Spending Accounts

$ Health Care

$ Dependent Care

HC Eligible Expenses:

$ Medical deductibles and co-payments(office visits, physicals, etc.)

$ Dental expenses(check-ups, cleanings, braces)

$ Vision expenses(exams, glasses, contacts)

$ Prescription drugs

With HC Acct W/out HC Acct

Annual Pay $30,000.00 $30,000.00

Spending Account Contribution

$2,000.00 0.00

Taxes Paid (21.5%) $6,020.00 6,450.00

After Tax Expenses 0 2,000.00

Income $21,980.00 $21,550.00

Savings $430.00

How Do I Save?

HC Acct vs. Tax Deduct• You may only claim medical expenses that are in excess of 7.5% of your gross income and you are required to itemize to take the deduction (7.5% of a $30,000 is $2,250).

• The minimum for the HC account is $100 per year so you can reap the tax benefits without having to contribute a large amount of money.

HC Acct and Insurance

• Prescriptions

• Deductibles

• Co-Pays

• Co-Insurances

Spending Accounts

Dependent Care – Cost of care for children & elderly adults to enable you to work.

DC – Eligible Expenses

• Day-Care for Pre-K age or under.

• Before/After School care for children up to age 12.

• Summer Camp (up to age 12).

• Care for an elderly adult.

With DC Acct W/out DC Acct

Annual Pay $30,000.00 $30,000.00

Spending Account Contributions

$5,000.00 0.00

Taxes Paid (21.5%) $5,375.00 6,450.00

After Tax Expenses 0 5,000.00

Income $19,625.00 $18,550.00

Savings $1,075.00

DC Example:

If you claim the DC expenses as a tax deduct, the maximum expenses allowed is $3,000.00 for one dependent and $6,000.00 for two or more.

DC Acct vs. Tax Deduct

Gross Annual Salary

% Credit of expenses up

to max.

Maximum1 dep / 2 or more

15,000.00 or less

35% 1050.00 / 2100.00

30,000.00 27% 810.00 / 1620.00

43,001.00 20% 600.00 / 1200.00

DC Acct vs. Tax Deduct

Example:• If your gross annual income is

$30,000.00 and you have one child in daycare with annual expenses of $5,000.00 your savings, under the tax saver plan, would equal $1,075.00 and your savings under the Tax Credit would be $810.00.

Spending Acctount Fees

$ 5.10 per month $ Must reenroll each year

Annual Contribution

Annual Maximum:

*Health Care Acct. - $2,500 Max

*Dependent Care Acct. - $5,000 Max

Annual Minimum:*HC and/or DC acct. is $100.00.

Flexibility

•Debit Card

•Change in Family Status

•Grace Period

Use It or Lose It• Plan members should estimate their expenses carefully because remaining funds at the end of the plan year are forfeited.

For more information, visit our website at:

www.lsuagcenter.com

Questions?