Flexible Savings Account (FSA) is one of the perks which comes with many employer-sponsored insurance plans. FSA may allow you to save tax so that you can put aside money for some expenses, which can include healthcare, dependent care, or commuting expenses. However, withdrawing the funds from FSA may seem daunting. In this blog post, we will discuss everything you need to know about how to withdraw money from a Flexible Spending Account.
Know Your FSA Account
Before you learn the steps on how to withdraw money from your FSA account, it is important to understand your FSA account. FSAs are offered through your employer, and you get to choose the amount you will be contributing to the account every year. Once the contribution is made, the amount is divided and deducted from your paycheck throughout the year. Typically, FSA contributions are capped at $2,700 a year. However, this amount may vary depending on the plan.
Step 1: Check Your Balance
Before making a withdrawal, it is important to check your FSA account balance. You can do this by logging into your account through your employer's website.
Step 2: Know the Type of Expense You Want to Pay
It is important to know the type of FSA expense you want to pay before making a withdrawal. For example, healthcare expenses may require a different process than dependent care or commuting expenses.
Step 3: Submit a Claim
After knowing the type of expense, you can submit a claim through your FSA account. The claim form may require the following information:
- Date of service/expense
- Name of the service provider (if applicable)
- Description of the expense
- Amount
Step 4: Wait for Approval
Once you have submitted the claim form, you will have to wait for the approval of the claim by the FSA administrator. Approval times may vary depending on the plan, but typically it takes 2-3 days.
Step 5: Receive Payment
Once your claim is approved, you will receive a payment through direct deposit or a check, depending on the plan. Make sure to confirm the method of payment with your plan administrator.
Conclusion
Withdrawing money from your Flexible Savings Account is a simple process if you follow these steps. It is important to stay organized, know the type of expense you want to pay, and submit the claim form in a timely manner. Most importantly, keep your receipts and documents of every expense you claim, in case of an audit. Follow these steps to use your FSA account to its full potential and save on taxes.
