As we approach the end of another year, it is time to take an accounting of different areas of our lives. Spending patterns are a big aspect of this assessment. A financial review can reveal areas of high spending and areas where greater savings are needed. A high spending area for many families is the cost of healthcare. These bills, if left unpaid, can lead to a bankruptcy filing.
One way to account for the high cost of healthcare is to utilize a flexible spending account. Employees contribute to these accounts to pay for certain expenses and the contribution is exempt from payroll taxes. At the end of the year, the owner of this account may find that they have overspent or under spent on their accounts. If FSA funds are still available at the end of the year, this may be a good time to get an annual checkup, buy an extra pair of glasses or learn about other treatments and procedures that allow FSA funds to be applied. If you underestimated the amount of funds needed in your account and overspent, it is important to keep all receipts from healthcare expenses. These expenses may be eligible for 2012 tax deductions. Reviewing the receipts can also give a better estimation of spending for 2013.
Flexible spending accounts are a great way to address the rising cost of healthcare. Even the most carefully planned FSA may not be enough to cover a catastrophic health event. A health crisis may require additional help to obtain debt relief.
An experienced bankruptcy attorney can help you evaluate your legal options. An attorney may be able to help you gain a fresh financial start through Chapter 7 bankruptcy.
Source: www.kansascity.com, “Year-end tips for your flexible spending account,” Diane Stafford, Nov. 6, 2012