Tax Advantage Accounts
You work hard for your money, so why pay more in taxes than you need? A great way to lower your taxable income and pay for various expenses is to enroll in and contribute to a tax advantage account. When you pay for expenses on a pre-tax basis, your taxable income is lower and you will pay less in taxes at the end of the year. If you expect to have any out-of-pocket health care or day care expenses during the plan year, you will want to consider putting money into a tax-advantage account.
You have access to various pre-tax accounts through Bank of America:
- Health Savings Account (HSA)
- Health Care Flexible Spending Account (FSA)
- Dependent Care Flexible Spending Account (FSA)
- Limited Purpose Health Flexible Spending Account (FSA)
How to Access Your Funds
- Debit Card: (Healthcare FSA, Limited Purpose FSA and HSA) Bank of America will issue a Visa debit card. You can use your debit card for expenses at most pharmacies and physician offices.
- Online Banking: Bank of America offers online banking features for participants.
Preview Bank of America's website and reimbursement flash video.
Other Resources
- Visit www.FarmCreditMedicalToolkit.com to run estimates on tax-advantage accounts
- IRS publications 969 and 502.
- Review the Bank of America HSA User Guide.
Important Tax Information
- If you are reimbursed for an expense from a Tax Advantage Account, you cannot claim that expense as a deduction on your federal income tax return.
- Some states do not recognize contributions as pre-tax. If you live in those states, you will be subject to state tax on your contributions, though you will not be subject to federal income tax.
- Keep all receipts for expenses because substantiation (proof that expense is an eligible expense according to the IRS) is required by our vendor, Bank of America and the IRS.