younginvestor2013
Recycles dryer sheets
- Joined
- Feb 6, 2013
- Messages
- 226
I just set up my FSA deductions today (pre-tax deductions on transit and parking). A third party vendor "manages" the process. Basically, the IRS stipulates that you can deduct a max of $130 a month for transit related expenses and $250 (I think) a month for parking expenses.
I do incur about $100/month in transit expenses. However, a coworker mentioned that the vendor that manages this process does not ask for receipts or verify the expenses so one could inflate their expenses a bit. She mentioned you could set up recurring transfers to your checking account so it essentially is just a tax evasion method.
So, I decided to put $130 a month for transit + $100 a month for parking. This results in about $600 annual savings to me. I was quickly enrolled in the program online, and noticed that you do have to submit receipts with your claim for reimbursements.
On top of this, my administrator saw my annual election as my desire to contribute the full annual amount between now and December, so I'm looking at $2,760 going into my FSA between now and December!
The plan stipulates that you cannot make election changes unless a major life event occurs, and you can only roll over $500 to 2015 and you lose the rest.
So now I am all worried I'll have all this money going into my FSA that I won't be able to use. I just submitted a word doc as my "receipt" with a sentence on it saying the funds were used for transit expenses to see if the vendor will approve it.
What do you think I should do? Please no lectures on the ethics of this .... I'm not one to be a cheater, being relatively new to "corporate america" I just thought this was one of those loopholes that everyone took advantage of but maybe I am wrong?
Since I just set this up today, should I ask my HR administrator if I can change my elections first thing tomorrow even though it's already set up in the vendor's system?
Thanks!
I do incur about $100/month in transit expenses. However, a coworker mentioned that the vendor that manages this process does not ask for receipts or verify the expenses so one could inflate their expenses a bit. She mentioned you could set up recurring transfers to your checking account so it essentially is just a tax evasion method.
So, I decided to put $130 a month for transit + $100 a month for parking. This results in about $600 annual savings to me. I was quickly enrolled in the program online, and noticed that you do have to submit receipts with your claim for reimbursements.
On top of this, my administrator saw my annual election as my desire to contribute the full annual amount between now and December, so I'm looking at $2,760 going into my FSA between now and December!
The plan stipulates that you cannot make election changes unless a major life event occurs, and you can only roll over $500 to 2015 and you lose the rest.
So now I am all worried I'll have all this money going into my FSA that I won't be able to use. I just submitted a word doc as my "receipt" with a sentence on it saying the funds were used for transit expenses to see if the vendor will approve it.
What do you think I should do? Please no lectures on the ethics of this .... I'm not one to be a cheater, being relatively new to "corporate america" I just thought this was one of those loopholes that everyone took advantage of but maybe I am wrong?
Since I just set this up today, should I ask my HR administrator if I can change my elections first thing tomorrow even though it's already set up in the vendor's system?
Thanks!