Flexible Spending Accounts

Flexible Spending Accounts

FSA Savings Can Really Add Up

Does your employer’s benefit plan include flexible spending accounts (FSAs)? If so, you can increase your take-home pay by using pre-tax dollars to pay for eligible FSA expenses for you, your spouse, and qualifying children or relatives.

Here’s how an FSA works. You set aside money for your FSA from your paycheck before taxes are taken out*. Then use your pre-tax FSA funds throughout the plan year to pay for eligible health care or dependent care expenses. You save money on expenses you’re already paying for.

And depending on how your health FSA plan is set up, you may be able to carry over up to $500 of unused funds to the following plan year.

Health FSA Eligible Expenses

  • Medical expenses: co-pays, co-insurance, and deductibles
  • Dental expenses: exams, cleanings, X-rays, and braces
  • Vision expenses: exams, contact lenses and supplies, eyeglasses, and laser eye surgery
  • Professional services: physical therapy, chiropractor, and acupuncture
  • Prescription drugs and insulin
  • Over-the-counter health care items: bandages, pregnancy test kits, blood pressure monitors, etc.
  • See more examples on our Health FSA Expenses page

Learn more by visiting our Health FSA page.

Dependent Care FSA Eligible Expenses

  • Care for your child who is under age 13
    • Before and after-school care
    • Baby sitting and nanny expenses
    • Day care, nursery school, and preschool
    • Summer day camp
  • Care for a relative who is physically or mentally incapable of self-care and lives in your home
  • See more examples on our Dependent Care FSA Expenses page

Learn more by visiting our Dependent Care FSA page.

Important: To find out the specific eligible expenses for your FSA plan, review your employer’s Summary Plan Description (SPD).

More Money in Your Paycheck

Your increased annual take-home pay and FSA savings depend on your income tax bracket. If you are in a 30 percent tax bracket, you can save $30 for every $100 that you put into your FSA. Put $1,000 in your FSA, and you increase your annual take-home pay by $300*.

Your FSA savings can really add up! Find out your potential FSA savings with our online FSA savings calculator.

FSAs benefit everyone — single individuals, families, and soon-to-be retirees. Check out how other people save money on our FSA Savings Examples page.

FSA Guidelines

FSAs are regulated by IRS rules. The rules state that you can only use your FSA funds for IRS-approved expenses during the FSA plan year. You must keep all receipts and other supporting documentation that verify your FSA eligible expenses.

Learn more by visiting our FSA Participation Guidelines page.

* FSA contributions are deducted before federal and most state taxes. Savings vary depending on your tax bracket. Check with your tax advisor for details regarding your state taxes and your tax savings.