Tax Savings Plan Participant Information & Forms Tax Savings Plan The Tax Savings Plan, offered to you by your employer, can provide significant tax savings. The Tax Savings Plan allows you to redirect certain allowable expenses that you have incurred, and pay for them with tax-free money. These allowable expenses are divided into the following categories: Reimbursable Medical Expenses Reimbursable Child and Dependent Care Expenses If you do not utilize the Tax Savings Plan, you must pay for those expenses after the federal and state governments have taxed your income. However, if you participate in the Tax Savings Plan, you pay for those expenses before the government can claim its share of your check. This, in effect, lowers the amount you pay in taxes. Now You Can Pay Less Taxes If you make $24,000 a year and redirect $4,320, your W-2 Form (your earnings statement that you receive at the end of the year) will show that you earned $19,680 that year. This is not a tax deferment, a retirement plan or a savings account, but it is a way for you to pay less taxes. The example below illustrates the savings available to you if you use the Tax Savings Plan: Without Tax Savings Plan With Tax Savings Plan $ 2,000 Taxable wages $ 2,000 Wages - 300 (15% federal tax) -100 Employee health insurance premium - 60 (3% state tax) - 60 Reimbursable medical expenses -153 (7.65% social security tax) -200 Dependent care expenses $ 1,487 Net take home $ 1,640 Taxable wages - 100 Employee health insurance premium - 246 (15% federal tax) - 60 Reimbursable medical expenses - 49 (3% state tax) - 200 Dependent care expenses -125 (7.65% social security tax) $ 1,127 Net take home pay $1,220 Net take home pay Save $93 monthly ($1,116 annually) This is only an example of savings for participants in the Tax Savings Plan. The savings will not be identical for everyone. Possible Savings To You A good rule of thumb for estimating your savings is to multiply your expenses by 25% for an approximate idea of your minimum savings on any particular expense. For example, a participant with an annual child care expense of $4,000 could save a minimum of approximately $1,000. ($4,000 x.25 = $1,000.) B A N K 800-346-7660 In Kansas City, call 816-860-8565 umb.com
Your Social Security Deduction and Benefit Payments As you saw in the previous example, the amount being paid to Social Security has been reduced along with the amounts being paid for other taxes. Even though you are contributing less to the Social Security system, there will usually be no effect on your future Social Security benefit payments due to participation in the Tax Savings Plan. In a few cases, a person will see monthly Social Security benefits decrease by only a very small amount. The example illustrated below will show the effect on Social Security benefits for someone who participates in the Plan for five years and redirects $2,000 of their annual income into the Plan. Without Tax Savings Plan With Tax Savings Plan Social Security Reduced Social Security Age Income Benefits per Month Age Income Benefits per Month 30 $18,000 $679 30 $16,000 $674 27,000 863 25,000 862 40 $18,000 $740 40 $16,000 $735 27,000 864 25,000 862 50 $18,000 $761 50 $16,000 $756 27,000 856 25,000 852 Reimbursements, Account Balance and Plan Changes Reimbursement can be made for any allowable expenses as long as they are incurred during your participation in the Plan. Claim forms can be sent in any time after your first paycheck of the Plan Year. Please be sure to attach to the form a copy of the receipt for the expense(s). There will be a grace period following the end of the Plan Year, which allows you the opportunity to submit late claims (for expenses incurred during the Plan Year.) Reimbursements will be made within five working days of UMB Bank's receipt of a valid claim. Balances of your individual accounts will be indicated on the stub portion of your reimbursement checks. A statement will be sent to you 30 days prior to the end of the Plan Year, indicating the current balances at that time. You may also call UMB Bank at 816-860-8565 or 800-346-7660 for your account balances. Changes to category participation can only be made during the year under one of the following conditions: 1. A change in employment status for you and/or your spouse. (If you anticipate an employment status change, please call for assistance. This plan is COBRA eligible.) 2. A change in family status, such as marriage, birth, adoption, divorce or death. 3. A change in dependent provider (child and dependent care category only.) Participation in the Tax Savings Plan does require a little planning on your part, but the reward for your efforts is realized throughout the year. Take some time to consider this benefit, and see how much money you can save! Enrollment is Easy You will need to fill out an enrollment form and return it to the Human Resources department in order to participate in the Tax Savings Plan. Your Plan participation is for only one year at a time. You must re-enroll each year. This will enable you to design your tax savings, based on the amount of expenses you anticipate, even if those expenses change from year to year. Web UMB Bank s web address for the Tax Savings Plan: www.umb.com/business/employee benefit/ tsp.html. Questions? If you have questions please feel free to call UMB Bank at 816-860-8565 or 800-346-7660. A customer service representative will be happy to assist you. Need Forms? Ask your Human Resources representative, copy the forms in this booklet or download copies from www.umb.com/business/ employee benefit/docs.html. You will need Acrobat Reader to open and print the forms. This program is available free from Adobe at www.adobe.com/products/acrobat/ readstep.html. About Direct Deposit If you have not signed up to receive direct deposits of your reimbursements, you can start this process at any time during the plan year. Just attach a voided check from your bank account to your claim form. If you already receive your reimbursement via direct deposit, this information will carry over to the following year unless you notify us that you would like the direct deposit discontinued. Please make a special note to notify UMB Bank when you change bank accounts. This will ensure that the money is deposited into your current bank account, and that you will receive your reimbursement in a timely manner.
UMB Tax Savings Plan Expenses Worksheet Use this worksheet to assist you in determining your eligible Tax Savings Plan expenses for next year. Calculate amounts for the entire calendar year. Add up your regular medical expenses first, and then estimate any additional amounts you might need for illnesses and emergencies. Consult the Examples of Reimbursable Medical Expenses Chart to help you identify eligible expenses. Estimated Eligible Medical Expenses Medical Vision Dental Deductibles, copays $ Exams $ Checkups $ Prescriptions $ Lenses, frames $ Fillings, crowns $ Equipment, therapy $ Contacts, solutions $ Orthodontics $ Fees, services $ Eye surgery $ Extractions, surgery $ Other $ Other $ Other $ Other $ Other $ Other $ Total $ Total $ Total $ Total medical $ Determine how much you spend weekly on the dependent care which allows you to work. Multiply this amount by the number of weeks you will need dependent care next year. Estimated Eligible Child and Dependent Care Expenses Child care $ Adult dependent $ Total dependent care $ Estimated Annual Expenses and Tax Savings Grand total medical expenses $ Tax Estimate Table Annual Household Estimated Earnings Tax Rate Total dependent care expenses Total estimated eligible expenses Tax bracket percentage Annual tax savings Number pay periods per calendar year Estimated savings amount per pay period + $ x % $ $ <$30,000 25% $30,000 - $40,000 29% $40,000 - $70,000 31% >$70,000 33% Based on Social Security, federal and state income taxes. Rates are estimates based on national averages and may not reflect your actual tax rate.
1. How does it work? This category requires planning. You must determine how much you will spend during the plan year on medical care expenses that will not be covered by your health insurance. Divide the total amount by the number of pay periods each Plan Year to determine how much to deduct from each paycheck before taxes are computed and deducted. 2. What does this mean to me? Since this amount is a qualified expense, it is not considered as part of your wages and is not taxed. You will pay less in taxes and take home more of your paycheck. 3. What happens to the amounts that are deducted? The amounts are sent to your personal Reimbursable Medical Expenses Account at UMB Bank. As you incur the expenses, you will ask UMB Bank to reimburse you for that amount. You may continue the cycle below: Have money deducted from your paycheck (before taxes.) Incur expenses (not reimbursable by insurance.) Ask UMB Bank to reimburse you. You will be able to ask for reimbursements of several expenses on one form, but you cannot ask to be reimbursed for expenses you have not incurred. Please plan carefully. Any eligible medical expenses you do not incur by the end of the Plan Year cannot be refunded to you. For example, you will probably want to look carefully at your balance during the last two months. It may be time for you to schedule health-related appointments for you and your family in order to incur expenses that will use up the preplanned amounts. 4. How do I ask UMB Bank to reimburse me? A. Incur the expense. (Expenses must be incurred during the Plan Year.) B. Complete a Claim Form (reimbursement form). The form is simple all you need is your name, address and Social Security Number, as well as the date, type and amount of the expense. C. Attach a copy of your invoice or receipt for the expenses incurred. (Please keep the original copy for your records.) D. Sign the form and send it to UMB Bank. A reimbursement check will be sent to you. If you have an expense for less than $50, please send it in with your next claim so you have a will total of least $50. 5. What are the limits? You may include only those medical expenses not reimbursed by insurance. Medical, dental and vision care costs may be included, as well as insurance co-payments and/or deductibles. Insurance premiums cannot be included. Examples of Reimbursable Medical Expenses Look for the expenses in the following list that apply to you and your family. You may be surprised by the types of eligible expenses that can be included under the category described on the previous page. If any of these are out-of-pocket expenses not reimbursed by insurance, pay for them with pretax dollars through the Plan. Dental Artificial teeth Biteplate Braces Dental exams Dentures Extractions Fluoride treatment Oral surgery Orthodontia Root canals Fees and Services Ambulance Anesthesia Checkups Chiropractors Christian Science practitioners fee Co-payments Diagnostic fees Emergency room Fee for practical nurse Fee for licensed osteopaths Reimbursable Medical Expenses Deductibles associated with health insurance Hospital bills Obstetrical expenses Office visits Operations Physician fees Private nurses Routine physicals Hearing Hearing devices Hearing devices batteries Hearing examinations Medical Equipment Artificial limbs Communication devices for hearing impaired Crutches Modification of a vehicle for handicapped Wheelchair Medicine Insulin Prescribed medicine Birth control pills Therapy Alcoholism and drug addiction treatment Physical therapy Psychiatric care Psychologist s fees Therapy treatments Vision Contact lenses Contact lens solutions Eyeglasses Eye exam LASIK/Laser eye surgery Seeing-eye dog and its upkeep Special education for the blind Miscellaneous Acupuncture Braille books and magazines Care for mentally ill child Home improvements for medical conditions Lead-base paint removal Mileage to/from health care facility Orthopedic shoes Oxygen Parking at a health care facility Special plumbing for the handicapped Transportation expenses Tuition at special school for the handicapped Please note: The above example should not be considered a comprehensive listing or necessarily reimbursable in every situation. Please contact your UMB representative if you have any questions. Cosmetic procedures and medicines are not reimbursable.
Tax Savings Plan Medical Care Expense Claim Form Company Name: Participant Name: Address: City, State, Zip: SSN: Date: Daytime Phone: Pay Group (check one): Hourly Salaried Other Pay Cycle (check one): Weekly Every two weeks Twice per month Monthly Other Itemize expenses below and attach copies of invoices, written statements or receipts which support expenses being claimed. Medical Care Expense Date Incurred Name of Service Description of Person for Whom Amount Mo./Day/Yr. Provider Expense Expense incurred Total Amount of Medical Expense Total Amount Requested READ CAREFULLY The undersigned participant in the Plan certifies that all expenses claimed by submission of this form were incurred during a period while the undersigned was covered under the Tax Savings Plan and none of the expenses were reimbursable under any other health plan coverage. The undersigned fully understands that he or she alone is fully responsible for the sufficiency, accuracy and veracity of all information relating to this claim and that if an expense for which payment or reimbursement is claimed is not a proper expense under the Plan, the undersigned may be liable for payment of federal, state and Social Security taxes on amounts paid from the Plan that relate to such expense. The undersigned further agrees to fully indemnify the employer and the custodian for any expense paid or reimbursed under the Plan which is an overpayment or which should not have been paid. Employee (Participant) Signature Mail COPIES of your receipts and this form to: 125 TAX SAVINGS PLAN UMB BANK, n.a. P.O. BOX 412044 KANSAS CITY, MO 64141-2044 B A N K If you have any questions, please call 800-346-7660. For Internal use only Check Number: Date:
Child and Dependent Care 1. What are the rules concerning child and dependent care expenses under the Plan? First, only child/dependent care expenses (e.g., day-care centers, home-based day-care, babysitters) incurred during the time you work are eligible. Second, the expenses must be incurred so you, or both you and your spouse (if you are married), may work. The amount reimbursed for this care cannot exceed the annual earned income of the lower-paid spouse. Third, the expenses must be for care of children under age 13 or for the care of a spouse or dependent who is physically or mentally incapacitated. 2. If I select child and dependent care under the Plan, am I still eligible for the Dependent Care Credit (IRS Form 2441) on my income tax return? Your child and dependent care expenses eligible for federal tax credits will be reduced by the amount you contribute to child and dependent care through the Tax Savings Plan. 3. How does tax savings compare to the tax credit that I can claim on my federal tax return? It is suggested that people eligible for tax credit compare the savings produced by the Tax Savings Plan to the savings produced by tax credit before deciding which method is more beneficial. For those who earn $28,000 or less in combined gross income, the tax credit may be the most beneficial method. But first you should consider your family's circumstances. If you have questions, check with your tax consultant before enrolling in this category. 4. What must I estimate? You must accurately calculate how much money you will spend on child and dependent care to allow you to work. Determine the total amount of expenses you will incur for the entire year. Divide the total amount by the number of pay periods in your Plan Year to determine how much will be deducted from your paycheck before taxes are computed and deducted. Be careful not to assume a full year of expenses when you may incur only a partial year of child care expenses. A child entering school is a commonly overlooked change in day care needs. 5. What does participation in this part of the Plan mean to me? Since this amount is a qualified expense, it is not considered as part of your wages and it is not taxed. So you pay less in taxes and take more of your paycheck home. 6. What happens to the amounts that are deducted? The amounts are sent to your personal Child and Dependent Care Expenses Account at UMB Bank. The amounts will be used to reimburse you for expenses you incur. As you incur the expense, ask UMB Bank to reimburse you. You may continue the cycle below: Have money deducted from your paycheck (before taxes). Incur expenses. Ask UMB Bank to reimburse you. The amounts are deducted in equal amounts, each pay period, even though you may be incurring expenses greater than or less than the deductions. If you prefer, you may wait to ask for several reimbursements on one form, but you cannot ask to be reimbursed for expenses you have not incurred. Please be sure that you plan carefully since any child and dependent care expenses you do not incur by the end of the Plan Year cannot be refunded to you. 7. How do I ask UMB Bank to reimburse me? A. Incur the expenses. B. Complete a Claim Form (reimbursement form). The form is simple you need to indicate your name, address and Social Security Number, as well as the date, the child s name, type and amount of the expense, and the Tax Identification Number or Social Security Number of the child care provider. C. Attach a copy of your invoice or receipt for the expense incurred. Please keep the original copy of your receipt for your records. D. Sign the form and send it to UMB Bank. A reimbursement check will be sent to you. 8. Are there any limits to reimbursement? You may include up to $5,000 per family each year in this category.
Tax Savings Plan Child and Dependent Care Expense Claim Form Company Name: Participant Name: Address: City, State, Zip: SSN: Date: Daytime Phone: Pay Group (check one): Hourly Salaried Other Pay Cycle (check one): Weekly Every two weeks Twice per month Monthly Other List child and dependent care expenses below and attach copies of invoices, statements or receipts which support the expenses being claimed. Name of Dependent(s) Claim Period From to *Total Amount of Expense Incurred: $ Child and Dependent Care Provider Information Provider name Address City, State, Zip Provider Tax I.D. number or Social Security number *Total Amount of Expense Requested: $ *NOTE A. The total amount claimed under the Plan for any coverage period must not exceed the lesser of your wages or salary for the Plan Year or the wages or salary of your spouse. If your spouse is either a full-time student or is incapable of taking care of himself or herself, then he or she is deemed to have monthly earnings of $200 if there is one (1) child or dependent, and $400 if there are two (2) or more. B. No payment may be made under the Plan if the service provider is your dependent for federal income tax purposes, or is your child or stepchild and is under age 19. C. Child and dependent care contributions made under the Plan will be reported on your form W-2, Wage and Tax Statement. READ CAREFULLY The undersigned participant in the Plan certifies that all expenses claimed by submission of this form were incurred during a period while the undersigned was covered under the Tax Savings Plan, and none of the expenses were reimbursable under any other child/dependent care plan. The undersigned fully understands that he or she alone is fully responsible for the sufficiency and accuracy of all information relating to this claim. If an expense for which payment or reimbursement is claimed is not a proper expense under the Plan, the undersigned may be liable for payment of federal, state and Social Security taxes on amounts paid from the Plan that relate to such expense. The undersigned further agrees to fully indemnify the employer and the Custodian for any expense paid or reimbursed under the Plan which is an overpayment or which should not have been paid. Employee (Participant) Signature Mail COPIES of your receipts and this form to: 125 TAX SAVINGS PLAN UMB BANK, n.a. P.O. BOX 412044 KANSAS CITY, MO 64141-2044 B A N K If you have any questions, please call 800-346-7660. For Internal use only Check Number: Date:
Tax Savings Plan Child and Dependent Care Receipt Date Received from The amount of $ for child/dependent care Provided for For the period of through Child and Dependent Care Provider Information Provider name Address City, State, Zip Provider Tax I.D. number or Social Security number Provider Signature Mail a COPY of this receipt along with the CHILD AND DEPENDENT CARE EXPENSE CLAIM FORM to: 125 TAX SAVINGS PLAN UMB BANK, n.a. P.O. BOX 412044 KANSAS CITY, MO 64141-2044 If you have any questions, please call 800-346-7660. UMB 011972 (R 11/02) Book & forms B A N K