Saving 25-50% on Chiropractic Care
These new vehicles fund your out-of-pocket healthcare expenses with pretax dollars—saving you up to 50% on wage (FICA) and income taxes.
If you own a home, every April 15 you get a 100% income tax deduction for your real estate taxes and for the interest on your mortgage. (NOTE: Although there are limits on the deductibility of mortgage interest, most people do get a 100% deduction.) Now, you can get similar tax benefits for your chiropractic care.
Flexible Spending Accounts (FSAs)
An FSA allows you to specify a designated amount of your pre-tax wages for out-of-pocket medical expenses. FSAs formally covered only sickness care, and you had to use your entire designated amount by December 31 of each year ("use it or lose it").
The rules have changed. FSAs can now be used for wellness carelike chiropractic, and for many over-the-counter medications. Moreover, you are now allowed an additional 2 1/2 months—until March 15—to spend any unused funds from the prior year.
For example, suppose that you have a wellness plan with your chiropractor costing $200 a month ($2,400/year) and that you are in a 33% combined city, state and federal income tax bracket. Using an FSA to pay for your chiropractic wellness care will save you about 40% every month—33% in income taxes plus 7.53% in employee wage taxes (FICA + FUTA).
Wellness Plan Cost With and Without an FSA
| Without an FSA | $200/month | $2,400/year |
| With an FSA | $120/month | $1,440/year |
| Net Savings | $80/month (40%) | $960/year (40%) |
To set up an FSA to fund your $200/month in chiropractic care:
- Tell your employer to set aside $200/month of your pre-tax wages in an FSA. This will reduce your monthly take-home pay by only about $120/month.
- Pay your chiropractor with your FSA debit card, or periodically submit a statement to your employer and get $200/month in tax-free reimbursements.
You pocket the additional $80/month in tax benefits.
$$$ TIP:
- Employers like FSAs as much as you do, because employers also save 7.53% in employer FICA + FUTA wage taxes. That's why the majority of U.S. employers already offer FSAs. If your employer does not yet offer one, point out how he can save 7.53% for very little extra paperwork.