Did you know that you can use tax-free dollars to pay for music lessons?
The Federal Flexible Spending Account (FSAFEDS) program allows you to set aside pre-tax salary dollars into an account. You can use the funds to pay for out-of-pocket health care and dependent care costs. According to the website Benefits.gov, citizens participating in the program save an average of 30 percent on these expenses.
The FSAFEDS website (FSAFEDS.com) can provide answers to your questions about how to enroll in the program and establish accounts. But here’s a fact you may not already know: you can use the funds in your Dependent Care (Day Care) Flexible Spending Account (DCFSA) to pay for music lessons for children under the age of 13 or any dependent who is incapable of self-care due to a physical or mental handicap. The DCFSA can also be used to pay for other activities in lieu of day cares (e.g., swimming lessons, arts & crafts), summer day camps (but not overnight camps), and babysitters both in and out of the home.
Don’t forget the “Use or Lose” rule. All Federal Flexible Spending Accounts may only be used during the Benefit Period, and any funds not used to pay for eligible expenses will be forfeit after the Benefit Period, so plan your saving carefully.
Also be aware that the Dependent Care Tax Credit may be more beneficial to you than a DCFSA. Check out https://www.fsafeds.com/fsafeds/summaryofbenefits.asp#WhichIsBetter to determine which option is better for your tax situation. Either way, make sure that you are taking advantage of tax benefits related to dependent care if you qualify.
To submit music lessons at Michelle Tuesday Music School for DCFSA reimbursement, use our Federal Tax ID# 27-2942983.