Save on Taxes With A Flexible Spending Account (FSA)

If you have a health plan through a job, you can use a Flexible Spending Account (FSA) to pay for copayments, deductibles, some drugs, and other healthcare costs.

What is an FSA?
A Flexible Spending Account (also known as a flexible spending arrangement) is a special account you put money into that you use to pay for certain out-of-pocket health care costs.

You don’t pay taxes on this money, but this means you’ll save an amount equal to the taxes you would have paid on the money you set aside.

Employers may make contributions to your FSA, but aren’t required to.

When is the deadline?

You generally must use the money in an FSA within the plan year. But your employer may offer one of 2 options:

  • It can provide a “grace period” of up to 2 ½ extra months to use the money in your FSA.
  • It can allow you to carry over up to $550 per year to use in the following year.

Your employer can offer either one of these options but not both. It’s not required to offer either one.

At the end of the year or grace period, you lose any money left over in your FSA. That means it’s important to plan carefully and not put more money in your FSA than you think you’ll spend within a year on things like copayments, coinsurance, drugs, and other allowed health care costs.

Find out more at this link to the Healthcare.Gov site



Adult daycare center Yes 
After school program Yes 
Au pair Yes 
Au pair Yes 
Babysitting (work-related, in your home or someone else’s) Yes 
Babysitting by your relative who is not a tax dependent (work-related) Yes 
Before or after school program Yes 
Before or after school program Yes 
Child care Yes 
Child care Yes 
Custodial elder care (work-related) Yes 
Dependent or elder care (while you work, to enable you to work or look for work) Yes 
Elder care (in your home or someone else’s) Yes 
Extended care (supervised program before or after regular school hours) Yes 
Housekeeper who cares for child (only portion of payment attributable to work-related child care) Yes 
Nanny Yes 
Nursery school Yes 
Payroll taxes related to eligible care Yes 
Preschool Yes 
Preschool Yes 
Registration fees (required for eligible care, after actual services are received) Yes 
Senior day care Yes 
Senior day care Yes 
Sick child care Yes 
Summer day camp Yes 
Summer day camp Yes 
Total payments (transferred from previous administrator) Yes 
Transportation to and from eligible care (provided by your care provider) Yes 
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