What is an FSA?
A flexible spending account, or FSA, is an employer-sponsored benefit that allows participants to set aside pre-tax funds from their paychecks to help them pay for approved out-of-pocket health care or dependent care expenses. FSAs are an annual plan-year benefit--meaning funds will either expire or a portion of the funds roll over to the following year, depending on your employer’s plan. You'll want to spend down this account every year based on your plan's rules.
Why an FSA?
Most people have expenses through the course of the year that they will need to pay with their own money--or “out-of-pocket.” The advantage of setting aside your funds in an FSA is that you never pay taxes on this money. So, every time you spend it on your out-of-pocket expenses, it’s like getting a 25%-30%* discount!
Calculate your Potential Savings
*tax rates may vary, depending on income and other factors