Flexible Spending Accounts – Did You Know?
Flexible spending accounts (FSAs) are a way to pay for medical expenses and get a tax break at the same time. You decide how much to contribute to the FSA before the start of the year and then that amount is deducted from each paycheck. The contributions are pre-tax and the reimbursements for the expenses come out tax-free.
FSAs are generally “use it or lose it”, however. If you don’t use all the money, it will be lost. Unused dollars cannot be carried over from year-to-year. Make sure you are on track to use all of the funds. If not, they can be used for a variety of expenses, such as eye glasses and other items. Be sure to review your FSA spending to make sure you don’t lose this tax-free benefit.