What Is a Flexible Spending Account?
A Flexible Spending Account (FSA) is a plan designed to help you manage the rising costs of health care by allowing you to set aside money to pay for out-of-pocket medical expenses. You can think of it as a personal account just for health care expenses.
You set aside money on a pre-tax basis — this means as long as you use the money for eligible medical expenses, you won’t pay income taxes on it. Download a list of eligible medical expenses or use our Election Worksheet to estimate your health care costs and decide how much to put in your FSA.
2024 FSA Maximum Contribution Limit: $3,200
Increase Your Take-Home Pay
Paying fewer taxes means you keep more of the money you make. In the example pictured, Jane estimates she will spend $2,400 on medical expenses for herself next year. Here’s how she can save with an FSA.
| Jane's Income/Expenses | With FSA | Without FSA |
|---|---|---|
| Jane's Annual Income | $50,000 | $50,000 |
| Pre-Tax Contribution | $2,400 | $0 |
| Jane's Taxable Income | $47,600 | $50,000 |
| Taxes | $11,900 | $12,500 |
| Jane's Take-Home Pay | $35,700 | $37,500 |
| Out-of-Pocket Health Care Expenses | 0 | $2,400 |
| Jane's Spendable Income | $35,700 | $35,100 |
| Jane's Savings Each Year | $600 |
The savings amounts in the example are provided by Surency for illustrative purposes only. You may save more or less based on your own tax situation. Some states do not recognize these tax exclusions for this program. No part of this website is tax, financial, or legal advice. You should consult your own legal and tax advisers regarding your personal situation and whether this is the right program for you.
