Bankrate's 2009 Tax Guide
Capital gains
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FSA deadline extended to March 15

The same holds true if you're having trouble hearing. Sometimes pride prevents people from admitting they need hearing aids, but often the costs of an examination and the hearing device can also be roadblocks. An FSA can help with the financial component, including the purchase of extra hearing aid batteries.

Replenish medicine cabinets

It's no secret you can use FSA money to compensate for any prescription co-payments.

If you need to refill some prescriptions now, LeValley-Cocovinis suggests buying in bulk. But FSA money also can be used for many over-the-counter medications.

Pick up extra headache medications, as well as cold medications to combat those early spring sniffles that always seem to show up this time of year. "You want to look at the expiration date, but there's no reason not to go to the local drugstore now and buy everything you use," says LeValley-Cocovinis.

Consider replenishing or purchasing a first-aid kit. "Get yourself a really good first-aid kit," says LeValley-Cocovinis. "Since it will qualify as a medical expenditure, get the big one, the $50 one. The Mylar blanket, the ice pack and all the items can really come in handy."

Other often-overlooked FSA items LeValley-Cocovinis says you might want to pick up while you're at the drugstore include OTC contraceptives and Rogaine. Medical equipment such as blood-pressure monitors, thermometers, and neck, wrist or other joint braces also qualify for FSA reimbursement, as do dietary supplements, including vitamins, minerals, and herbal and botanical items -- as long as you use them to treat a current illness, not simply to augment your general health.

If you're unsure about exactly which OTC items your FSA will cover, ask your benefits manager or plan administrator. Many grocers and drugstores also help out customers with cash register receipts that note FSA-eligible purchases.

Drugstore.com, the online version of your local pharmacy, also has a special "FSA store" featuring OTC products most commonly reimbursed from the accounts. Even if you don't want to buy from the site, it's a good place to browse for ideas on how to zero out your FSA.

Fine-tuning your FSA

As you are trying to wipe out your FSA balance, it's also a good time to think about refining your annual contribution. Although it's probably too late to make changes for the 2009 benefit year (most companies hold open enrollment seasons each fall), you can make changes if there's a substantial change in your life. This includes the birth or adoption of a child or a change in your spouse's work status. If that happens, you can adjust your account contributions to better match your new medical needs.

Even if you can't change your FSA contribution amount, track your 2009 medical costs closely. Knowing exactly what your medical expenses are and which ones aren't covered by insurance will help you decide just how much to put into an FSA the following year.

"People are nervous about wasting the money, but if you plan ahead you can still save on federal taxes, FICA (Social Security) and in a lot of cases, state income taxes," says LeValley-Cocovinis.

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