I have a question, if you sign up for a company FSA and deposit say 1000.00, if you use that 1000.00 for approved FSA items, say over the counter medications on the approved list. Is there a limit on how much of the appoved product you can buy and what you can do with it? Or could someone running a small business on the side potentially use a FSA account to purchuse items and resell them?
I assume you must use it for the same types of items that you could have taken a Schedule A deduction if you were paying out of pocket. And you only get one of these deductions for medical expenses for yourself or your dependents. Anyway, if you resold the items, you would have to declare the receipts as income, which seems like it would just cancel out the effective deduction due to the original use of pretax money.
-- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
The wording I've seen is that the medication needs to be for a current need, not 'bought in advance'. In theory, this is an honor system situation. In practice, buying $1000 worth of asprin for resale will get you in trouble. JOE
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