February 26, 2024

Bucks Blog: Dodging the Proposed 2013 Tax Increase

Robert Nuebecker

In this weekend’s Your Money column, I use the president’s efforts to have the six-figure set pay more in taxes as an excuse to remind the world about the mysterious under-use of flexible spending accounts.

For as long as I’ve been a real grown-up, I’ve been pushing the envelope with these things, getting prescriptions for pretax massages and using pretax money for subway rides and care for my daughter.

But many people don’t sign up for the accounts because they see them as nuisance, what with all of the receipt-collecting and rejected reimbursement requests. (Others don’t have access to them because their employer doesn’t offer them, or because they are retired and need an employer to set aside money in the accounts.)

Well, now there may be another reason to sign up. Even if (or more likely, when) the president only gets part of what he wants, using a pretax account for commuting, health and dependent care expenses would be a pretty easy way to keep money away from the tax man. That’s assuming that the accounts themselves don’t fall under new restrictions, which is possible, though unlikely in my view.

If you’re in the $200,000 to $250,000 and above income category, what will you do to avoid the higher bills?

Article source: http://feeds.nytimes.com/click.phdo?i=d441982bd8633dbdad8ea8fa62460411

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