I am still angry about losing the money in my dependent care FSA for 2019

[Anonymous]

Anonymous wrote:This is a feature, not a bug. It's what allows participants in the system to use money targeted for contribution before it is actually contributed (at least for the Health Care FSA). It also makes it significantly easier to administer, and prevents, to a certain extent, the program from being a giveaway to upper middle class families.

It's a unified whole, and you need to either take it or leave it.

no, it’s not a feature. it’s an extraordinarily poorly designed system. having to guess how much you will spend in order to avoid losing money is a terrible system. you should be able to roll it over or get it back out, or there should just be a simpler tax break.

[Anonymous]

The entire FSA system makes no sense. Congress could achieve the same results at far lower cost and with less administrative hassle and without arbitrarily excluding people whose employers don’t offer these plans by just allowing an above the line deduction for eligible expenses subject to the same cap.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wonder if the Congress even had to be involved. Could the IRS have just issued a one-time rule?

There was a grace period early on in the pandemic when people were offered the opportunity to stop or change their contributions. They also expanded allowable expenses to cover a lot of OTC items. OP has not been paying attention.

Np here - for me, the grace period was after I’d already made my (front loaded) contributions. I ended up being able to get my money back but, because one child care provider failed and I had trouble tracking them down, I just barley could get my money back relying on receipts from the other. We only had Jan and Feb daycare and I think the grace period went into effect in something like May - when I’d already made the full amount of contributions.

[Anonymous]

Anonymous wrote:I have always hated the system where you have to guess (months before the year even starts) what your needs will be for the whole year and then you are penalized by losing the money if you guess wrong. I think that is extraordinarily unfair (especially when it comes to the health care FSA because there is no way to know in advance what your healthcare needs will be or how much they will cost!). I don't understand why Congress hasn't required that people get the money they deposited back! Thankfully, we were given the option to stop contributing at some point last year, but I still lost money. It's not going to break us, and we are luckier than many people since our jobs are safe, but it still irks me to no end.

FSAs are stupid stupid stupid policies.

We should just get a tax credit instead. What's the point of FSAs besides to create work for FSA servicing companies?!

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have always hated the system where you have to guess (months before the year even starts) what your needs will be for the whole year and then you are penalized by losing the money if you guess wrong. I think that is extraordinarily unfair (especially when it comes to the health care FSA because there is no way to know in advance what your healthcare needs will be or how much they will cost!). I don't understand why Congress hasn't required that people get the money they deposited back! Thankfully, we were given the option to stop contributing at some point last year, but I still lost money. It's not going to break us, and we are luckier than many people since our jobs are safe, but it still irks me to no end.

Congress won't care because they have bigger concerns that UMC people who lost money in a tax advantaged account that most Americans don't have access to. The whole idea that the ability to use pre-tax money for certain services is based on an employer's whim is absurd, but the there are larger problems too address right now

Linking health insurance to employee compensation is more absurd. This is just a byproduct of that.

To be fair, the Republican contributions to the health care debate includes health savings accounts which can only be paired with high-deductible plans. These never expire (so were attacked, rightfully, for being a giveaway to the rich since the rich are more likely to save as they don’t live paycheck to paycheck). But the high deductible plan makes sense policy wise if you are trying to discourage medical consumption (to reduce demand and costs — except it may also lead to people ignoring major problems to avoid out of pocket expenses or depleting that savings, never mind their premiums being lower).

[Anonymous]

Jist doctor up the reciepts... litterally NO ONE will hint you down over this. Keep the care receipts below $600 so the IRS doesn't have evidence of taxable income to the private party you listed as care provider. Problem solved. Screw the IRS and this awful scam from our government to create another way to filter money from people.

Think about it... If million people lose even 100 bucks in these accounts, that is another 100 million that gets taken from people to be used at will. I promise you the number is higher than 100 million. Do you really think they are coming after the little folks who were smart enough to dodge the scam by simply scamming the scam back?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wonder if the Congress even had to be involved. Could the IRS have just issued a one-time rule?

There was a grace period early on in the pandemic when people were offered the opportunity to stop or change their contributions. They also expanded allowable expenses to cover a lot of OTC items. OP has not been paying attention.

You do know what DP stands for don’t you?

I am a DP, and I did reduce my contributions. At that time our school was planning to do hybrid and I thought kids would be in a camp on non school days. Then hybrid was completely canceled and the programs I was planning weren’t feasible anymore, so I wasn’t able to use the money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I have always hated the system where you have to guess (months before the year even starts) what your needs will be for the whole year and then you are penalized by losing the money if you guess wrong. I think that is extraordinarily unfair (especially when it comes to the health care FSA because there is no way to know in advance what your healthcare needs will be or how much they will cost!). I don't understand why Congress hasn't required that people get the money they deposited back! Thankfully, we were given the option to stop contributing at some point last year, but I still lost money. It's not going to break us, and we are luckier than many people since our jobs are safe, but it still irks me to no end.

Congress won't care because they have bigger concerns that UMC people who lost money in a tax advantaged account that most Americans don't have access to. The whole idea that the ability to use pre-tax money for certain services is based on an employer's whim is absurd, but the there are larger problems too address right now

Hmm yes, congress seems to have been focusing on UC people and ALL their tax advantages.

Congress doesn't care about the UMC. They're either throwing scraps to the poors or making tax cuts for the rich. Those in the $250k - $400k bracket are screwed.

UMC is kept busy with FSA, HSA, 401k, 529, and who knows what else. All are scams that keep UMC from learning to invest. It's only once all those accounts are fairly high that UMC discovers that investing its own money would have amounted 3x+ what they have now.

[Anonymous]

I'm trying to rapidly spend my FSA since it looks like I'll be switching jobs. If I do, I will come out ahead, unlike OP. The companies win some and lose some.

[Anonymous]

Anonymous wrote:The entire FSA system makes no sense. Congress could achieve the same results at far lower cost and with less administrative hassle and without arbitrarily excluding people whose employers don’t offer these plans by just allowing an above the line deduction for eligible expenses subject to the same cap.

Why any cap?

[Anonymous]

Why did you lose 2019 money? Covid was in 2020

[Anonymous]

I used up your money, OP. I switched jobs in late January 2020 but used all of my FSA money ($2000) before then to pay for my portion of my child's braces (insurance paid the other half) and a pair of glasses. Maybe only $100 had been taken out of my paycheck. I did have to pay tax on it, but that was a lot less than $2K.

[Anonymous]

Anonymous wrote:Jist doctor up the reciepts... litterally NO ONE will hint you down over this. Keep the care receipts below $600 so the IRS doesn't have evidence of taxable income to the private party you listed as care provider. Problem solved. Screw the IRS and this awful scam from our government to create another way to filter money from people.

Think about it... If million people lose even 100 bucks in these accounts, that is another 100 million that gets taken from people to be used at will. I promise you the number is higher than 100 million. Do you really think they are coming after the little folks who were smart enough to dodge the scam by simply scamming the scam back?

My kids are older now (18+) so haven't done the dependent care FSA in a while but when I had it, I used to do exactly this. They did karate camp one summer and didn't want to go back. I used the same receipt and white inked over the date and used a date from the current year. I don't think the IRS cross-verifies this to the provider's income. If they did, I'd have been caught several years. We are talking $1000ish dollars each year. It was my money and I wanted it back.

[Anonymous]

Anonymous wrote:Why did you lose 2019 money? Covid was in 2020

The thread is from 2021.

[Anonymous]

Anonymous wrote:

Anonymous wrote:J

I did the same thing. I have a folder with old camp receipts just in case I fall short of what I put into FSA. It's very easy to doctor the receipts and even my accountant (who is somewhat conservative) said I could just put a random SS for the babysitter I was using but I decided to use the camp receipts instead. I highly doubt they would go back and check everything for the 3000 I submitted for.

My kids are older now (18+) so haven't done the dependent care FSA in a while but when I had it, I used to do exactly this. They did karate camp one summer and didn't want to go back. I used the same receipt and white inked over the date and used a date from the current year. I don't think the IRS cross-verifies this to the provider's income. If they did, I'd have been caught several years. We are talking $1000ish dollars each year. It was my money and I wanted it back.