It's like giving yourself a raise when you use TexFlex.
Everyone likes discovering money in a pocket, or getting a discount. After all, every little bit helps as life's unexpected expenses come along. TexFlex is a way to reduce the costs of life's expected expenses. If you and your family members have at least $180 per year in health, dental or day care expenses, you'll benefit from this program. Flexible spending accounts like TexFlex are regulated under IRS code Section 125.
Money from your paycheck is taken out - before taxes - and placed in a TexFlex account. You decide how much to contribute. You then tap into your TexFlex account when you need to pay yourself back for health care and dependent day care expenses. The money you reserve in a TexFlex account isn't eroded by income tax or FICA tax - not one cent.
The money you set aside in an FSA-Day Care or FSA-Health is called a pledge. This pledge is deducted from your paycheck before taxes. This pre-tax deduction lowers taxable income, so you pay less Federal income taxes and Federal Insurance Contributions Act (FICA) taxes.
- Flexible Spending Account - Health is for money spent on eligible medical, dental, and vision expenses.
- Flexible Spending Account - Day Care is for money spent on day care or dependent care for an adult family member.
