Nov
09

Need More Money to Invest in Your Chicago Real Estate? Save on Taxes With an FSA

November 09, 2010

Whether you’ve just bought or are thinking of buying Chicago real estate, you can always find ways to use a little extra money. Even in a brand new home there are things like curtains and furniture and even new cleaning supplies to buy. When you’re a homeowner, it seems there’s always something that could use a little extra of your time, attention and hard-earned money.

Well, if you would rather that hard earned money go into your home and not to Uncle Sam, this may be your year to open a flexible spending account (FSA). Money you set aside for the account will not be taxed. Unfortunately, you aren’t allowed to set aside tax-free money for home improvements, but, according to the

Equifax Personal Finance blog, you can use an FSA for childcare, medical and even adoption expenses.

In the Equifax article, “

Open-Enrollment and FSAs: A Bonanza of Tax Advantages,” tax expert Eva Rosenberg explains how FSAs work. You estimate the amount of money you’ll likely spend on qualified expenses. The total is divided by 12 and taken from your paycheck monthly. When you incur one of the expenses, you pay for it and send in a receipt for reimbursement from your account. The advantage? The money is pulled from your paycheck before taxes are taken out – you never pay federal or state income taxes on it, and you don’t pay FICA or Medicare on it either. That’s a savings of 22 to 42 percent! It’s a sale on money!

You shouldn’t get greedy and overestimate your qualified expenses, though. If there’s any money left in your FSA at the end of the year because you didn’t spend it on qualifying expenses or you simply failed to turn in receipts and request reimbursement, you will not get it back. There are limits on the amount you can set aside, too. You’ll find all the details at the

Equifax Personal Finance blog. Check it out now before your open enrollment period closes.

Categories: Education, Featured

About The Author

Read All Stories By Carol Morgan

Carol Flammer is a public relations and social media marketing expert, strategist and consultant. With 20 years of experience, Carol has established herself as the “go to” for real estate and construction products public relations and social media. Carol is president of Flammer Relations, Inc., and managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Atlanta and Chicago.

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