Flexible Spending Accounts (FSAs)

Flexible Spending Accounts (FSAs) allow you to pay for eligible expenses using tax-free dollars. Important: There is a “use it or lose it” rule imposed by the IRS. If you do not spend all the money in your FSA by March 31 of the following year for expenses incurred from January 1 – December 31, unused dollars will be forfeited per IRS regulations for pretax contributions.

Note: There is a “use it or lose it” rule imposed by the IRS. If you do not spend all the money in your Healthcare, Limited Purpose or Dependent Care FSA by March 31 of the following year for expenses incurred from January 1 – December 31, unused dollars will be forfeited per IRS regulations for pretax contributions.

How Much Could You Save?

Flexible Spending Accounts (FSAs) are one of the easiest ways to reduce your taxable income and keep more of what you earn. When you contribute to an FSA, the money you set aside for eligible healthcare expenses is not taxed—meaning every dollar goes further. For example, let’s say Tom sets aside $2,000 in his FSA for the year. Normally, he’d pay $560 in federal income tax, $100 in state income tax, and $153 in FICA taxes on that amount. But by using his FSA, Tom avoids all those taxes and saves $813. That’s money he can use for things like doctor visits, prescriptions, or medical supplies—without it ever being taxed. FSAs don’t just help with budgeting—they help you make the most of your paycheck.