I have to admit that when I stumbled across this idea, I couldn’t believe that I hadn’t thought about it before now.
If you’re like most preppers, you probably don’t have endless resources when it comes to stockpiling prepping supplies. Oftentimes, as preppers, we go without the certain things that other people buy so that we can prepare for emergencies.
Well, I’m about to tell you how you can buy some of your prepping supplies tax free in the United States!
Here’s How Simple It Is!
Most employers allow their employees to have a certain amount of money from each paycheck deposited into what is called a Flexible Spending Account (FSA). This money can be used to pay for qualifying out-of-pocket health care costs.
Here’s the kicker, let’s say that you elect to have the maximum of $2,600 withheld from your paychecks over the course of the year and deposited into your FSA. It isn’t taxed so if you have $2,600 in Flexible Spending Money, you can spend that entire amount on your out-of-pocket medical expenses without Uncle Sam getting his slice of the pie.
There’s Always a Catch
Before you think I’m advocating that you try to use your FSA money for things like backpacks and camping gear, you need to keep something in mind. The caveat Uncle Sam puts on the FSA program is that in order for him not to tax you on the money you contribute to the account, the money must be spent on qualifying out-of-pocket health care expenses.
When most people think about FSA spending, they think of things like paying for doctor visit co-payments and medications. What they don’t realize is that there are certain things that may qualify for FSA spending that can be put back with your emergency preparedness supplies.
The main things that come to mind are first aid supplies and both prescription and over-the-counter medications but the list is actually quite long.
Let’s Keep Things in Perspective
One of the tricky things about FSA’s is that you have to tell your employer before the calendar year how much you want to contribute to the plan. Essentially, you’re making a guess about what your out-of-pocket health care costs for the year will be.
If you end up having a good year and you don’t have a lot of out-of-pocket expenses, you’ll lose the money you contributed to your FSA if you don’t spend it. Unfortunately, it’s a use it or lose it kind of program.
Many people find themselves worrying how they’ll spend their leftover FSA money at the end of the year so they don’t lose the money.
My suggestion to you is to check with your employer to see exactly what your plan allows you to spend money on and buy items that you think you’ll use or may need to use.
I’m certainly not a tax expert so you should check with one first but in my way of thinking, I don’t believe you would be doing anything fishy by doing this. You’re spending your money on heath care products that your insurance company won’t pay for. That’s what the plan is intended for.
If you look over the list of approved items closely, you’ll probably be able to purchase quite a few items that you can put back for a rainy day and the money you spend will all be money that you earned that never got taxed!
A Bit of an Afterthought
It just dawned on me that I live in a state that doesn’t have sales tax. If you live in a state that does have sales tax, you’ll pay this on the items that you purchase but you won’t pay any state or federal taxes on the income that you had deposited into your FSA.