Updated on April 05, 2024Table of Contents
A flexible spending account (FSA) is a tax-advantaged account that allows employers to designate a specific amount of money for certain eligible expenses. Employees can contribute pre-tax dollars to an FSA, and employers can contribute or match contributions.
Overall, FSAs can be a valuable tool for employees to save money on eligible expenses.
What is an FSA (Flexible Spending Account)?
An FSA (Flexible Spending Account) is a tax-advantaged account offered by employers in the U.S. that allows employees to set aside pre-tax dollars to pay for eligible healthcare or dependent care expenses, such as medical treatments, prescriptions, or childcare.
What is the FSA used for?
An FSA is used to cover qualified medical and dependent care expenses, such as doctor visits, prescription medications, medical devices, or daycare costs. It helps reduce taxable income by allowing pre-tax contributions to pay for these expenses.
Who is eligible for an FSA?
FSAs are typically available to employees whose employers offer them as part of their benefits package. Self-employed individuals are generally not eligible. You can use your FSA to pay for expenses incurred by you, your spouse, or dependents.
What qualifies as an FSA expense?
Eligible FSA expenses include medical services like doctor visits, prescriptions, dental care, vision care, and over-the-counter medications. Dependent care FSAs can be used for child or elder care expenses.
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