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AN EXAMPLE: Unreimbursed Medical Spending Account
Here's an example based on 2001 Federal Tax schedules. The example shows how you could reap
greater tax savings and increase your spendable income by using the Unreimbursed Medical Spending
Account. Let's assume:
- A married employee with two children
- Filing a joint return with standard deductions
- $65,000 in combined annual income
- $1,500 in Unreimbursed Medical expenses
| Annual Family Income |
$65,000 |
$65,000 |
| Before-tax Contribution to Spending Account |
-$0 |
-$1,500 |
| Adjusted Gross Income |
$65,000 |
$63,500 |
| Standard Deductions |
$7,600 |
$7,600 |
| Taxable Income |
$57,400 |
$55,900 |
| Federal Income & FICA Tax |
$10,128 |
$9,716 |
| After-tax for Medical expenses |
-$1,500 |
$0 |
| Spendable Income |
$45,772 |
$46,184 |
| Your Savings |
$0 |
$412 |
In this example, using the Unreimbursed Medical Spending account results in more spendable income.
But remember, this is only an example. The best approach for you, and your actual savings, will
depend on your income and tax situation.
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