Personal Finance (Not Investing) • Parking FSA

Hi everyone, here is my story: I started a new job and will need to pay $185 per month for parking in a parking garage in downtown.

There are two options for payment with the parking garage: either direct withdrawal of funds from the bank account or the credit card. The credit card will have an additional fee that is (back of hand estimate) somewhere between 3 to 5 dollars a month and the direct withdrawal will have none.

However, using the card option allows for linking it to a Parking FSA account, which has a debit card. If I went with Parking FSA, the story would be that

• I deposit around $185 per month from the regular paycheck into the FSA in order to pay the parking fees

• There is a tax writeoff/deduction that the FSA account would provide

• Apparently there is no "use it or lose it" provision for a Parking FSA by end of year -- you can roll the remaining funds over from year to year

• However, if you depart the employer, you lose any and all remaining funds in the FSA.... which is ouch. Depending on the case, you could lose a significant chunk of change (a month's worth)

The total target income is $171,000 pretax in North Carolina. I'm starting to doubt that the FSA would provide significant tax deduction benefit that justifies the bureaucratic hassle, the risk of losing any and all remaining funds at the end of employment at the company, and dealing with the estimated 3-to-5 dollars a month credit card fees -- and it would be less hasslesome to just have a direct withdrawal on a monthly basis of the money from the regular checking account. Additionally my tax bracket is going to be relatively high since the pretax income is $171,000 so I doubt that the tax deduction would be worth it in and of its own [it would really be worth if it if took the income and shoved it into a lower tax bracket].

I do plan to max out the 401k in the 2025 calendar year.

Would such a sentiment be correct? How should one think about this?

Statistics: Posted by mtwistercapitalist — Tue Oct 15, 2024 9:15 pm — Replies 2 — Views 164

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