Question Schedule I & Flexible Spending Acct taken out of pay

[janie]

Is the amount I have taken out for my FSA (all medical) deducted under Schedule I, number 4 "Less Payroll Deductions".
I don't know whether to include the $3,000 when figuring my monthly total for expenses on medical or just the amount after FSA is exhausted. I want to use the correct amount on net income.
I am just under the median, have an attorney who says I can do a Chapter 7. I just want to be sure of what my DSI is.
Thanks!

[tcreegan]

Hi janie,

It shows up as a payroll deduction on the pay stub right?

It gets deducted on the means-test....probably means it is OK on schedule I

Tom in Colo

[debee]

I think in the post above, Tom is thinking of HSA. FSA accounts are different. You don't include them in the means test or on the schedules I/J. Instead you use your actual medical expenses. Just use your income as if the FSA amount wasn't taken out, and then deduct your actual medical.

[ccsjoe]

I think in the post above, Tom is thinking of HSA. FSA accounts are different. You don't include them in the means test or on the schedules I/J. Instead you use your actual medical expenses. Just use your income as if the FSA amount wasn't taken out, and then deduct your actual medical.

debee, I actually included my FSA in means test and Schedule I at my attorney's advice. And no, I'm not confusing FSA with HSA as I asked this very question to my attorney.

[daylate]

From a common sense point of view, I'd have to agree with debee, but then again ccsjoe had his attorney tell him to do the opposite...I'm guessing that maybe because its a "use it or lose it" kind of account it is considered an expense when deducted-goes to show once again why it is important to discuss these kind of issues with your attorney who should be familiar with your district

[tobee43]

debee, I actually included my FSA in means test and Schedule I at my attorney's advice. And no, I'm not confusing FSA with HSA as I asked this very question to my attorney.

we also included the FSA in the means test and sch I.....as well, our atty also did advise that we should include it same as with you joe.

it was excepted just fine.

[tobee43]

From a common sense point of view, I'd have to agree with debee, but then again ccsjoe had his attorney tell him to do the opposite...I'm guessing that maybe because its a "use it or lose it" kind of account it is considered an expense when deducted-goes to show once again why it is important to discuss these kind of issues with your attorney who should be familiar with your district

daylate, you make an excellent point...each district is very different...actually, and although there are written do's and do nots...the trustees can and will exercise their own personal judgment as to ones situation. it's important to be mindful of that....no matter what one may see "written".

[ccsjoe]

From what my attorney exlpained to me, because I did question the wordingdifference between HSA and FSA, although both are different accounts for IRS purposes, for BK purposes they are considered the same. I included FSA deductions on means test line 34c and Schedule I 4d. Of course each district may vary, but it is 1. unstoppable (once you sign up you can't stop until end of year) and 2. use it or lose it, so a real deduction/expense.

[debee]

The instructions for line 34 of the means test http://www.justice.gov/ust/eo/bapcpa...ne_by_line.pdf indicate that the FSA amount should be listed as an expense at line 31 to the extent it exceeds 19B. Of course you can't claim an expense here that you don't have which is why you can't list your FSA amount unless you actually spend/spent it. Which takes us right back to medical expenses being allowed only to the extent that they are actually incurred.

If you could just deduct it from income the same way social security comes out, anyone could jack their FSA up to the max (which I think is 5k) with no medical expenses at all just to pass the means and tweak their schedules I/J.

[debee]

From what my attorney exlpained to me, because I did question the wordingdifference between HSA and FSA, although both are different accounts for IRS purposes, for BK purposes they are considered the same.

They are different in BK & treated as such. HSA is a line 34 item with health & disability insurance, whereas FSA is a line 31 item with unreimbursed, "out of pocket" medical expenses.

We got different advice than what your lawyer gave you Joe, and we're in the same district.

[janie]

I will put the FSA amount spent on line 31a and gather paperwork to prove this amount. I found an online means test that does the math for me, subtracted the allowed amount entered on 19b.
Thanks to all of you for the input! I have more questions but will put under a different post unless I find my answers on the BK site!

[tcreegan]

...gotta hand it to you debee....the line-by-line on the means test is a mind-twister, and you got it right.

I'll bet people use it as if HSA and trustees let it slide.

Tom in Colo

[ccsjoe]

...gotta hand it to you debee....the line-by-line on the means test is a mind-twister, and you got it right.

I'll bet people use it as if HSA and trustees let it slide.

Tom in Colo

Good very well be Tom. Good catch debee!

[tobee43]

The instructions for line 34 of the means test http://www.justice.gov/ust/eo/bapcpa...ne_by_line.pdf indicate that the FSA amount should be listed as an expense at line 31 to the extent it exceeds 19B. Of course you can't claim an expense here that you don't have which is why you can't list your FSA amount unless you actually spend/spent it. Which takes us right back to medical expenses being allowed only to the extent that they are actually incurred.

If you could just deduct it from income the same way social security comes out, anyone could jack their FSA up to the max (which I think is 5k) with no medical expenses at all just to pass the means and tweak their schedules I/J.

well.......soooooooooo...we finally agree...good catch!!!