Flexible Spending Accounts (FSA)

A Flexible Spending Account (FSA) is a special savings account offered by many employers that allows you to set aside pre-tax dollars to pay for qualified medical or dependent care expenses. Because the money is deducted before taxes, it lowers your taxable income, potentially saving you money. You can use the funds for things like doctor visits, prescriptions, or childcare. However, FSAs are typically use-it-or-lose-it within the plan year, meaning unused funds may be forfeited unless your employer offers a rollover or grace period. It’s a helpful tool for managing healthcare costs tax-efficiently.