How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Megan C Your Own Question

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14407
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
23669918
Type Your Tax Question Here...
Megan C is online now
A new question is answered every 9 seconds

I have an FSA. I went to use the last of my 2012 contributions

Resolved Question:

I have an FSA. I went to use the last of my 2012 contributions at the periodontist in September 2012. The procedure couldn't be performed due to complications. The Dr. later sent me a refund check for $700. Without thinking I deposited that money into my checking account. I since elected to contribute the maximum $2500 for my 2013 plan year. But the company that manages the FSA plan for the company that I work for says that I can't use my FSA credit card until I reimburse the account $700, which I will immediately lose because the 2012 plan year ended in March of 2013 (my company's grace period). So I'm supposed to give them $700 just to lose it? Where does it go, to the IRS? I don't think I'll be doing that. But I may have to lose $700 to save $2500. This doesn't make any sense to me; I mean it's my money. But the FSA management company says that the $700 are pre-tax dollars. OK, I get that. So here's my question: Can I simply file a 1099 and pay the tax on that $700, thereby giving me access to my 2013 FSA funds of $2500?
Submitted: 1 year ago.
Category: Tax
Expert:  Megan C replied 1 year ago.

MyVirtualCPA :

Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

MyVirtualCPA :

I hate to be the bearer of bad news, but you cannot do as you propose

MyVirtualCPA :

Unfortunately, you would have to reimburse your plan as you did not have the procedure done as planned in 2012.

MyVirtualCPA :

The big drawback to using an FSA account is if you don't use it you lose it.

MyVirtualCPA :

So, there is no way to pay tax on these funds and keep them.

MyVirtualCPA :

I'm truly sorry this is not the news you had hoped to hear

MyVirtualCPA :

The funds lost do not go to the IRS, ironically they go to your employer

MyVirtualCPA :

these offset the situations where people leave the company after using all of their FSA balance without having the full amount withdrawn from their paychecks

Customer:

I see. Well thanks for your assistance. You also answered another question I had about leaving the company before all deductions could be made. Well, I'll just have to deal with this I guess.

Customer:

Thanks again for your help.

MyVirtualCPA :

I'm truly sorry. I wish I had more good news to give you

MyVirtualCPA :

If you would, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

No worries. It's not your fault. At least I know now.

Customer:

Knowledge is power, right.

MyVirtualCPA :

Yes, if you leave the company before your deductions is made then the employer is stuck with the cost

MyVirtualCPA :

So, the employer keeps the "lost" funds

MyVirtualCPA :

It's ironic that they do not go to the IRS

Customer:

A cozy arrangement.

MyVirtualCPA :

Yes, I don't personally participate in these plans for that reason. I'm always afraid I won't use my funds

MyVirtualCPA :

I'd do it only if I had a procedure early in the year that I knew the cost before open enrollment ended

Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 14407
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 6 other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.