The good news is vision correction procedure LASIK is a qualified medical expense by the IRS and, therefore, can be used with funds set aside in an HSA or a flexible savings account, known as an FSA.
The funds in these tax savings accounts are set aside directly from your paycheck – before taxes are taken out. Not only do you not pay taxes on the funds in the accounts, but the amount in the account is deducted from your gross income – lowering your overall tax exposure. The savings can quickly add up given many taxpayers fall in the 10 – 22 percent tax brackets, just for federal tax alone. Most states – except California and New Jersey – also forgo taxing the funds in these accounts, which means even more savings. In addition, any interest earned on the funds in these accounts is also tax-free.
How Much Can I Contribute to an HSA or FSA?
The IRS announced another significant increase in contribution limits for HSAs in 2024: $4,150 for individuals and $8,300 for families. The 2024 contribution limit increase for individuals is the largest on record – more than $300 over the 2023 limit. HSAs are particularly useful for qualified medical expenses like vision correction surgery because the funds can be rolled over from year to year, allowing account holders to save up for a vision correction procedure. Importantly, according to noted finance personality David Ramsey: “Contributions to your account stay there until you use them. They roll over year after year and earn interest—you can even invest the money in your HSA to grow tax-free! This thing is like a health-savings machine!”
Note unlike HSAs, FSAs must be spent on qualified expenses within the calendar year, or risk losing the balance. There are exceptions, as some plans allow a small portion to be carried over in the following plan year.
If your employer offers an FSA program, you can use it in conjunction with your HSA to fund a vision correction procedure.
This information was provided by American Refractive Surgery Council
Dr. Neil Griffin is a leading ophthalmologist and specializes in Cataract and LASIK surgery in Myrtle Beach. He is committed to providing world class surgical technology and the most advanced vision diagnostics to the North and South Carolina areas. Griffin Eye Center offers a state-of-the-art on-site LASIK suite for the best Laser Vision Correction. To see if you are a candidate schedule a free LASIK screening. Visit griffineyecenter.com or call 843-449-6414.