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Can you double up on FSA contributions?

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. In a recent article ("New directions for health care flexible spending accounts"), you said the new $2,500 FSA limit is on an individual basis. Does this limit apply separately to a married couple? C.M., Beaverton, Ore.

A. Yes, but only if they are each eligible to participate. Otherwise, the $2,500 limit is the total amount a couple can contribute to a flexible spending account (FSA) for health care expenses, beginning in 2013. For instance, if each spouse has an FSA for the same or different companies, they can contribute up to $5,000. But the limit is $2,500 if one spouse participates and the other doesn’t.

Tip: Guidelines for the new rules are provided in IRS Notice 2012-40.

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