Last fall I opted to set aside $3, 600 in my flexible spending account for 2005 — I knew that we’d be spending a good chunk of change on medical expenses this year, so I figured we might as well save a bit off our taxes. Well, four wisdom teeth and a shiny set of man-braces later, and we’ve already recouped the entire amount. Actually, if I wasn’t lazy about faxing in my claim for the last few hundred bucks, I would’ve cashed it out entirely a couple of months ago. Anyway, depending on where we end up tax-wise this year, this represents a total federal tax savings of at least $540. I say ‘at least’ because, as I’ve noted previously, I’ve decided to redistribute my retirement contributions such that I’ll be able to capture my full 403(b) match while at the same time funding a Roth IRA. But I still haven’t worked out what effect this will ultimately have on our tax bracket. We do very well in terms of exemptions and deductions (lots’o’kids, mortgage, retirement contributions, charitable donations, etc.) so my best guess is that we’ll still be able to keep ourselves in the 15% tax bracket when all is said and done. If not, our tax savings will be even greater.
Leave a Reply