Flexible Spending Account (FSA)

A Flexible Spending Account (FSA) is a tax-advantaged financial account that allows employees to set aside pre-tax money from their paycheck to pay for eligible out-of-pocket expenses, such as medical costs, dental bills, and certain dependent care expenses. By using pre-tax dollars, individuals can reduce their taxable income, potentially saving money on taxes. FSAs are typically offered by employers and come with a "use-it-or-lose-it" rule, meaning the funds must be spent within the plan year or they may be forfeited. It's a useful way to budget for healthcare expenses while benefiting from tax savings.