FSA: FSA stands for Flexible Spending Account. A Flexible Spending Account is a type of savings account that allows employees to set aside pre-tax dollars to pay for eligible out-of-pocket healthcare expenses. FSAs are typically offered by employers as part of a benefits package. FinStream has produced several videos on the benefits of FSA’s. Here’s a detailed look at FSAs:
Let’s say you elect to contribute $2,500 to your healthcare FSA for the year. Each paycheck, a portion of this amount is deducted pre-tax, reducing your taxable income. Throughout the year, you can use your funds to pay for eligible medical expenses, such as:
By using pre-tax dollars for these expenses, you save money that would otherwise go to federal income and payroll taxes.
FSAs can be a valuable tool for managing healthcare costs and reducing taxable income. However, careful planning is necessary to ensure you use the funds effectively and avoid forfeiting any money.
Watch these free videos on Finstream TV to learn more about FSA’s.
This is an error message