BYU Law Review Volume 2011 | Issue 4 Article 3 5-1-2011 Charitable FSAs: A Proposal to Combine Healthcare and Charitable Giving Tax Provisions Adam Chodorow Follow this and additional works at: https://digitalcommons.law.byu.edu/lawreview Part of the Health Law and Policy Commons, and the Tax Law Commons Recommended Citation Adam Chodorow, Charitable FSAs: A Proposal to Combine Healthcare and Charitable Giving Tax Provisions, 2011 BYU L. Rev. 1041 (2011). Available at: https://digitalcommons.law.byu.edu/lawreview/vol2011/iss4/3 This Article is brought to you for free and open access by the Brigham Young University Law Review at BYU Law Digital Commons. It has been accepted for inclusion in BYU Law Review by an authorized editor of BYU Law Digital Commons. For more information, please contact
[email protected]. DO NOT DELETE 10/15/2011 1:30 PM Charitable FSAs: A Proposal to Combine Healthcare and Charitable Giving Tax Provisions Adam Chodorow This Article considers two unrelated tax provisions—health care Flexible Spending Accounts (FSAs) and the charitable deduction. FSAs permit eligible taxpayers to set income aside tax-free to use for medical expenses. However, these accounts have a “use-it-or-lose-it” feature that discourages participation and creates incentives for unnecessary spending at year-end. The charitable deduction is available only to those who itemize their deductions, thus negating the incentive to give for the 65% of taxpayers who take the standard deduction. Prior attempts to fix these provisions separately—allowing taxpayers to roll over unused FSA amounts to the next year and moving some or all of the charitable deduction “above the line”—have failed.