5 Scenarios To Avoid Next Year By Using Your Flex 125 Funds Today
Why Your Flex Savings Account is a Tax Savings Superhero for Eyewear
It’s the Holiday Season! Everywhere you look, there are decorations, lights, and people in good spirits! What a wonderful time of the year. And if you’re like most of us, it’s also a season when you try to make the most of every single one of your hard-won dollars.
With holiday gifts to buy, parties to attend, and celebrations to plan, making the most of your money can be hard to do. However, if your employer offers a Flex 125 Spending Account or FSA as they are often called, that is one smart way to stretch your income to the maximum. It just takes a little bit of pre-planning.
Why A Flex Spending Account Is a Tax-Saving Superhero
Why is it so smart to participate in a Flex Spending Account plan? A Flex Plan is like a tax-saving superhero, without the cape. It can help you keep more of your hard-earned dollars in your pocket and away from the IRS.
Here’s how a Flex 125 Plan works: When you sign up, you designate a chosen amount of your salary to be taken out of each paycheck throughout the year before taxes are calculated. That pre-tax amount is saved for you in a Flex 125 fund. As the year goes on, those funds grow as you contribute more with each paycheck. You can spend those Flex Funds on eligible healthcare expenses, including — drumroll, please — a sassy new pair of eyeglasses, a year’s worth of contact lenses, or even a pair of prescription sunglasses!
And, since you are paying for these items with pre-tax dollars, it’s like getting a discount on your new eyewear!
At its core, a Flex Spending Plan basically gives you a discount on life’s unavoidable healthcare expenses. Pretty cool, right?
How Flex Plans Increase Your Take-Home Pay
For example, here is how you can increase your take-home pay with a Flexible Spending Account plan.
In this scenario, the employee makes $30,000 a year:
| Without a Flex 125 Plan | With a Flex 125 Plan | |
| Gross pay (Annual) | $30,000 | $30,000 |
| Flex 125 contribution | $0 | $ 1,000 |
| Taxable Income | $30,000 | $29,000 |
| Income tax paid (25%) | $7,500 | $ 7,250 |
| TOTAL Take-Home Pay | $21,500 | $21,750 |
| Increase in Take-Home Pay | $0 | $ 250 |
And, the more money you contribute to your Flex 125 Plan, the more your take-home pay increases. For tax year 2025, the IRS has increased the individual contribution limit to Flexible Spending Accounts to $3,300. For married couples, a joint household can contribute up to $6,600 pre-tax.
Use It or Lose It: Now is the Time to Spend Flex Funds
While Flexible Spending Accounts can put more money in your pocket, there are some rules involved. For example, you are required to spend those pre-tax funds on healthcare expenses in a timely manner.
Many FSAs require you to spend your funds accrued by December 31 of the year you contribute them. If you are unsure whether your Flex Funds must be spent within 2024, now is a great time to double-check with your human resources manager.
Flex spending is one reason why we get so many patients in our optical department this time of year. Many of our patients like to choose an attractive new pair of frames, treat themselves to a year’s worth of contact lenses for next year, select a pair of computer glasses, or find a new pair of prescription sunglasses for an upcoming vacation.
Whatever you decide to spend your Flex Funds on, we’re here to help. Our optical department has new frame styles arriving daily, and our expert staff will help you select a frame and lenses that complement your lifestyle.
5 Scenarios You’ll Avoid Next Year by Using Flex Funds Today
- Running out of contact lenses before an important job interview, big date, trip of a lifetime, class reunion, or long-awaited concert. Stock up now, and you won’t have to worry!
- Looking cool or cute at the dog park. When you see that cute guy or gal across the dog park and your pups start to frolic together, you don’t want them to see you squinting into the sunlight as a first impression. Use your Flex 125 funds now to get a pair of prescription sunglasses, and you’ll make a stunning first impression.
- Suffering a headache from too much screentime and missing out on fun after work. Select a pair of computer glasses today to prevent the headaches of tomorrow.
- Being unable to spy on your kids without them knowing. If you find yourself at a school event with your tweens and teens, but they wander off, you can relax! You will still be able to see who they’re hanging with across the gym or soccer field with updated prescription eyewear that looks great on you!
- Ordering the wrong dinner entrée because you can’t read the small-print menu. With the right pair of progressive lenses, you will be able to read the small print on menus even in the dim atmosphere of a high-end restaurant and choose the most delicious entrée ever!
When it comes to Flexible Spending Funds, December is the prime time to use them or lose them. Whatever you decide to spend your Flex Funds on, we’re here to help.
Stop by and see us today, or call to make an appointment for later in the month. But remember, it’s a busy time of year, and our appointments are filling up fast!