Flexible Spending Accounts (FSAs) Are An Easy Way To Lower Your Tax Bill
A flexible spending Account (FSA) is a way for you to put money aside tax free for important expenses. This can potentially save you hundreds of dollars in taxes. Put simply, an employer sets aside part of your earnings to pay for qualified expenses, and that process lowers the overall tax you owe at the end of the year.
There are primarily three types of FSA:
1. The Health Care FSA (also known as Medical FSA, Medical Expense FSA, or simply Health FSA), where qualified medical expenses are put aside. These can include insurance deductibles, co-payments, and coinsurance costs as well as specific products, treatments, and medications not covered by insurance. Medical issues can be serious, or as simple as buying a years worth of band-aids.
2. The dependent care FSA, where qualified child care expenses can be put aside. While almost always used for children, they can also be used for adult day care for elderly dependents (such as parents) that live with you.
3. The travel FSA, where costs of public transportation and in some cases parking can be put aside tax...
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