Funds from a flexible spending account (FSA) cannot be used for teeth whitening expenses. The U.S. Internal Revenue Service (IRS) issued Publication 502, Medical and Dental Expenses, which specifically excludes various medical expenses spent on unnecessary cosmetic procedures, such as teeth whitening.
Key Takeaways
- A flexible spending account (FSA) is a type of savings account that provides the account holder with specific tax advantages.
- Funds from a flexible spending account (FSA) cannot be used for teeth whitening expenses.
- The U.S. Internal Revenue Service (IRS) specifically excludes various medical expenses spent on unnecessary cosmetic procedures, such as teeth whitening, in IRS Publication 502.
- In most cases, you will need to pay for teeth whitening services out of pocket.
How a Flexible Spending Account (FSA) Works
A flexible spending account (FSA) is a type of savings account that provides specific tax advantages.FSAs are primarily for salaried employees since only qualified employers can establish and administer FSA plans; self-employed individuals are not eligible to open FSAs.
FSAs allow you to contribute a portion of your regular earnings to pay for qualified expenses related to medical and dental costs. Both contributions to and distributions from FSAs are exempt from federal income tax and employment tax, as long as FSA beneficiaries use the funds for qualified medical expenses and spend as much as they contributed in a particular year.
The money in an FSA must be used by the end of the plan year. However, some employers can offer a grace period for the use of the remaining funds in an FSA account. This grace period is typically no longer than two-and-a-half months, through March 15 of the following year.
Instead of a grace period, an employer may also choose to offer a carry-over. This means you can carry over up to $640 unspent contributions to your FSA to use in the following year.
In 2024, FSA contributions are limited to $3,200 per employer. If you are married and have a spouse who can open an FSA through their employer, they can also contribute $3,200 in their account, which gives you $6,400 to use in total.
An employer can make contributions to employees' FSAs but does not have to.
Qualified Medical Expenses for Flexible Spending Accounts (FSAs)
IRS Publication 502 defines qualified medical expenses as those that are included in an FSA plan description and would qualify for medical and dental expense deductions. To qualify, a medical expense must have a doctor's prescription, even if a drug can be bought over the counter, except for insulin.
An FSA beneficiary can also include dental expenses that either prevent or treat dental diseases. Dental expenses that are qualified to use with an FSA include:
- Teeth cleaning
- Sealants
- Fluoride treatments
- X-rays
- Fillings
- Braces
- Extractions
- Dentures
Can I Use My FSA for Teeth Whitening?
The IRS specifically prohibits using FSA funds for cosmetic procedures and cosmetic surgery to improve the appearance that is not necessary to treat or prevent disease. Medical expenses on procedures that do not qualify for FSA distributions include face-lifts, liposuction, hair removal, and teeth whitening.
Medical expenses paid for cosmetic procedures are only allowed if they are necessary to correct for deformity resulting from congenital issues, an accident, trauma, or a disease that caused disfiguration. For example, an FSA can be used for breast reconstruction surgery after a mastectomy to treat cancer.
FSA owners face tax consequences for any unqualified medical expenses.
Since teeth whitening is purely cosmetic and not related to a health condition or disease, it is not considered a qualified use of FSA funds. In most cases, you will need to pay for any teeth whitening equipment or procedures out of pocket.
How Can I Pay for Teeth Whitening?
Most people will need to pay for teeth whitening out of pocket. Some dental insurance plans offer a small allowance for cosmetic treatments such as teeth whitening, but it will not cover the full cost of whitening services. However, if you have a dental discount plan, the discount may apply to teeth whitening along with other treatments.
Is an FSA the Same as an HSA?
An FSA and an HSA are two different types of tax-advantaged savings accounts. An FSA is employer-sponsored and the money must be used up within a year. An HSA, or health savings account, is owned by you and there is no limit to when you can spend the money in it. You can only open and contribute to an HSA if you have a high-deductible health insurance plan. Both plans can be used toward qualified medical expenses.
How Much Does Teeth Whitening Cost?
If you have whitening done in-office by a dentist, the average cost is $650. If your dentist gives you take-home trays to use, the average cost is $400. At-home whitening treatments are usually under $100, and some can be as inexpensive as a tube of toothpaste.
The Bottom Line
A flexible spending account, or FSA, is a type of tax-advantaged savings account that is sponsored by an employer. You can use the money in it to pay for qualified medical and dental expenses without having to pay federal income tax on it.
However, the money in an FSA cannot be used for cosmetic procedures such as teeth whitening. If you want whiter teeth, you will have to pay for treatments out of pocket. These costs can run anywhere from under $50 to over $600, depending on whether you see a dentist or use treatments purchased over-the-counter for use at home. At-home treatments are far less expensive; in-office whitening treatments from a dentist will produce more dramatic results more quickly than over-the-counter options.
