The owner of a Flexible Spending Account (FSA) can use money from the account on various eye surgery procedures, including laser-assisted in situ keratomileusis (LASIK). The U.S. Internal Revenue Service (IRS) allows FSA distributions to be used for qualified medical and dental expenses that help prevent and alleviate diseases.
Flexible Spending Accounts
Only an eligible employer can start an FSA plan, while self-employed individuals are not allowed to open and maintain FSA accounts. The IRS allows a maximum contribution of $2,550 to an FSA in 2015. Contributions are exempt from federal income and employment taxes. Distributions are exempt from federal and employment tax only if an individual withdraws an amount not exceeding his contribution in that year and uses the funds for qualified medical expenses. An FSA owner can spend his funds on qualified medical expenses incurred by him, his spouse, dependents claimed on his tax return and his children under age 27.
Qualified Medical Expenses
Qualified medical expenses include costs necessary to treat or alleviate a health issue. Medical expenses, especially drugs, typically must be accompanied by a doctor’s prescription, except for insulin. Even if an individual bought an over-the-counter medication, he must obtain a doctor’s note that prescribes him a particular drug. Qualified medical expenses also include various vision and dental procedures, such as LASIK, teeth cleaning, braces, sealants, fillings and X-rays.
The IRS disallows expenses incurred on various cosmetic procedures, including liposuction, face-lifts and body parts correction. However, the IRS allows certain cosmetic surgery expenses if these procedures are done to correct disfigurements caused by illnesses, trauma or accidents.