The idea is to reduce your taxable income thereby reducing your personal income taxes.
Here are three simple ways to use your employer provided benefits to do so.
Flexible Spending Account
Use your employer provide FSA! It can be funded with voluntary employee pretax dollars to pay for unreimbursed medical, dental and child care expenses. If you’re lucky your employer may kick something in as well. FSA’s are used to pay for deductibles, co-payments, prescriptions, etc..
Keep in mind FSA’s are a “Use it or Lose it”, meaning you have until the end of the year to spend the money in your FSA or forfeit it . Yikes! (Some plans provide a 2.5 month grace period after the end of the year)
So plan conservatively at the beginning when contributing to your FSA. ( We will discuss Health Savings Accounts in future posts 🙂