New restrictions on health accounts (FSA/HSA)

This year a tax advantaged health account (such as a flexible spending account, health reimbursement account, health savings account, or medical savings account) can be used to purchase aspirin, flu medications, allergy pills, cold medicines, and other over-the-counter medications.

Effective January 1, 2011, funds from these accounts can no longer be used to purchase over-the-counter drugs unless the taxpayer has a prescription for them. Insulin is an exception and can still qualify without a prescription.

One tip – If an over the counter medication is required by you Doc, have them write you a perscription and it will still able to be deducted!