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Friday / May 20.
HomeminewsOptical Loses in US Tax Change

Optical Loses in US Tax Change

It is predicted that changes to US tax laws that wipe out the ‘use it or lose it’ aspect of tax-deductible healthcare accounts are likely to hit the optical industry hard.[/vc_column_text][/vc_column]

Flexible spending accounts (FSAs) are health care benefits offered by many US employers. FSAs allow workers to set aside a sum from their pre-tax wages (the maximum will be US$2,500 next year) to spend on a range of health care benefits.

Until now, the FSAs had to be spent in full each calendar year, or be forfeited.

Eyeglasses and contact lenses have tended to be a popular way to spend any excess left in FSAs in the lead-up to December 31. The US eye care industry takes full advantage of the annual FSA deadline, with end of year advertising campaigns reminding people that optical items are FSA-eligible.

However, a new regulation from the US Internal Revenue Service will allow taxpayers to roll over up to US$500 of their annual FSA balances to the following year.

The regulation, while likely to have a negative effect on optical sales in the December period, is designed to encourage more people to take advantage of FSAs and provide increased freedom on how – and when – to spend the benefit.

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