Year-End Advice for People about to Lose Their FSA Surpluses

If you signed up for a Flexible Savings Account to pay for your medical expenses with untaxed wages, you may be coming up on feeling like you’ve been a little too healthy for your own good — if you didn’t spend all of the money that you put in your FSA account this year, it will soon vanish.

Kay Bell of Don’t Mess With Taxes has some advice for people with an end-of-year FSA account surplus, including no-brainers like getting your teeth cleaned or signing up for a routine annual physical, to good ideas like getting a back-up pair of eyeglasses or a cache of batteries for your hearing aid, filling up the medicine cabinet with a year’s supply of whatever you turn to in times of flu or bad leftovers, or picking up a Hurricane Katrina-sized emergency first aid kit.

And I would add that you might want to consider switching from an FSA to a Health Savings Account. An HSA doesn’t have the spend-it-or-lose-it feature that makes FSA accounts so annoying.

One variety of tax that I don’t spend much time on here at The Picket Line is tariffs — taxes on certain imported goods. There are plenty of reasons to hate tariffs, but the Washington Post uncovered another:

Although the average tariff on non-agricultural goods imported into the United States is less than 3 percent, tariffs on a number of everyday consumer products — including clothing, luggage, dinnerware and handbags — range well into double digits. The same goes for some food, such as butter and cheese. (These tariffs are separate from special duties imposed on certain foreign products that the government has found to be “dumped,” or sold at unfairly low prices.)

…the system has evolved in a way that produces a bizarre result: Some of the stiffest tariffs apply to the types of goods that people of modest means tend to buy, and lower duties are imposed on similar products that are more often purchased by upper-income individuals.

Sweaters offer a vivid example: If they’re acrylic, the tariff is 32 percent. But if they’re wool, the tariff is 17 percent. On cashmere sweaters, the tariff is lower still — 4 percent — and on silk ones, 0.9 percent.…

In the case of low-end sneakers, tariffs range between 48 and 67 percent, but tariffs on higher-end sneakers are only 20 percent, and for leather dress shoes, the tariff is 8.5 percent. Plastic handbags are hit with 16 percent tariffs but reptile-skin ones with only 5.3 percent tariffs. For drinking glasses, the tariff is 28.5 percent if the value at the border is 30 cents or less, but 5 percent if the value is $5 or more.

“Over the past 40 years, we’ve created a very skewed system, where many of the things that poor families buy are very heavily taxed, and things that only rich families buy are not,” said Edward Gresser, a trade expert at the Progressive Policy Institute, a Washington think tank. “Of the five different kinds of taxes that the federal government imposes, tariffs are the smallest — but they’re by far the most regressive.”