Hi all - getting my Foundation Template set up and would love ideas for tracking health insurance reimbursements (i.e. reimbursed costs after submitting claims for out of network providers) and FSA reimbursements. Welcome any ideas for how to categorize in a meaningful way when for this kind of irregular expense when the reimbursement comes at least a month after the expense.
I will explain the FSA and let you extrapolate for the rest but let me know if you need more assistance.
Let’s say you get paid monthly and you contribute $1,200 to the FSA for the plan year. Your employer will deduct $100 out of each paycheck. When your paycheck comes into Tiller, use the splitter tool to gross up your net paycheck and show all the payroll deductions. Code the gross to income and all the deductions to expense except for the FSA deduction, code that one to transfer. When you receive your claim reimbursements, code those to transfer too. Code all your medical costs just like you would had you not done the FSA. If everything goes according to plan, those two transfer accounts (+1,200 and -1,200) will net to zero for the year. This may seem like overkill but at the end of the day I think you will be glad you did it.
This is really smoke and mirrors and is solely a creature of the tax law. $1,200 of your payroll for the year is not subject to federal income tax, Social Security tax, Medicare tax, and state income tax. Let’s put some numbers to this. (22+6.2+1.45+9=38.65). (1,200*.3865=463.80). So, you save $464 for all of your effort. The maximum FSA contribution is $2,750. (2,750*.3865=1,062.88). So, if you contribute the maximum, you save $1,063.
An Extra Bonus - Let’s assume the following. The plan year is the calendar year, you get paid monthly, you elect to contribute $2,750 for the plan year, you have a medical procedure performed during January, your share of the cost is $5,000, you pay the $5,000, you submit a FSA claim and are paid $2,750, and you sever employment with your employer at the end of January. Result - The employer deducts $229 (2,750/12) from your January paycheck and you are in the clear. The employer cannot come after you for the remaining $2,521 (2,750-229).
Thanks so much, very helpful and appreciate the detail!