The 2010 Defense Authorization Bill contains a very interesting provision that may help military families stretch their dollars a little further by allowing them to utilize a pre-tax Flexible Spending Account (FSA) to pay for certain expenses, usually health care and child care.
The 2010 Defense Authorization Bill contains a very interesting provision that may help military families stretch their dollars a little further by allowing them to utilize a pre-tax Flexible Spending Account (FSA) to pay for certain expenses, usually health care and child care.
FSAs are offered by private and government employers and can be a huge benefit if your family pays taxes and has child care and/or medical costs not covered by Tricare. I'll use my family as an example. In a usual year, we are in the 15% tax bracket. (I'm really just estimating here, because it seems we never have a "usual" year.) We also spend about $1000 on child care and about $2000 on non-covered medical expenses (mainly a lot of glasses.) If we reduce our taxable income by $3000, our tax bill would go down $450. We're spending the money anyway, it would be nice to be able to do it with pre-tax dollars.
Eighteen senators sent a letter to President Obama, urging him to work with Secretary of Defense Gates to ensure that this benefit is organized promptly. Let's all hope that it happens soon!