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I was planning on putting some money aside into an FSA account to cover LASIK. However, I found out that under current rules, there's a maximum of $2,550 that can be put aside for the year, which does not even get close to what the surgery actually costs.

Then I looked into straight up deductions for medical expenses. From what I could find, it appears that to take any kind of deduction:

  • I have to itemize my deductions when filing my taxes.
  • I can only deduct any medical expenses above 10% of my AGI.

So in conclusion, given my personal AGI, I cannot deduct anything other than what I can get from the FSA. Can someone confirm? Is there any other tax benefit I should be aware of?

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You're right. That's pretty much it.

You get a deduction for any medical expenses above 10% of your Adjusted Gross Income. You also have to itemize your deductions; claiming the standard deduction won't do.

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You can deduct eyesight correction surgery if it is medically necessary, you itemize deductions, and your medical expenses exceed 10% of your AGI.

Obviously, the portion you paid with the money from FSA doesn't count, since it is considered reimbursement, but the FSA contributions are pre-tax. Similarly with HSA.

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    No, FSA accounts were not limited before ACA: hrlaws.services.xerox.com/wp-content/uploads/sites/2/2014/11/… – AxiomaticNexus Oct 30 '15 at 2:35
  • "However, employers typically included an annual limit in their programs to reduce their risk of loss if an employee terminated midyear, and to limit forfeitures of employee contributions under section 125’s “use-it-or-lose-it” rule, which requires the forfeiture of FSA balances not used to reimburse eligible expenses incurred during the plan year." - While your linked document showed 'no limit' the rest of this sentence confirms what littleadv and I know to be true, $5000 was the typical maximum. I am personally unaware of any company offering a higher amount. – JTP - Apologise to Monica Oct 31 '15 at 12:32

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