Flexible Spending Accounts (FSA)
Flexible Spending Accounts for health care and dependent care can help you save money. The money you contribute to these accounts is not taxed, and you withdraw the money tax-free when paying for eligible expenses. It can potentially save you 30% or more on eligible healthcare and/or qualifying child and adult dependent care expenses. In addition to the pretax savings, you also benefit from using pre-tax dollars to pay for things such as medical co-pays and deductibles, dental and vision expenses, doctor prescribed medications and before-school and after-school day care expenses. Note: You will not be able to use your FSA to pay for most over the counter drugs and medicines unless you have a doctor's prescription. You will not need a prescription for insulin and diabetic supplies.
Health Care FSA
The Health Care FSA is available to benefits-eligible employees. It allows you to put aside money before taxes are withheld so that you can pay for eligible medical, dental, and vision expenses that are not reimbursed by any other coverage you and your qualifying family members have.
Due to IRS rules, the maximum amount you can contribute to a Health Care FSA in 2023 is $ $3,050.
Dependent Care FSA
The Dependent Care FSA allows you to put aside money before taxes are withheld so that you can pay someone to care for an eligible child or adult while you and your spouse (if you are married) work, look for work, or attend college full time (this account cannot be used for health care expenses).
You may contribute up to $5,000 per calendar year ($2,500 if married and filing separately) on a before-tax basis to a Dependent Care FSA in 2023.
IMPORTANT FSA GUIDELINES REGARDING ROLLOVER FUNDS
Keep in mind, Flexible Spending Accounts (FSAs) are typically "use-it-or-lose-it" accounts. Due to a recent IRS change, you may rollover up to $570 in unused 2022 FSA contributions to use for eligible expenses in 2023. You will forfeit any money above $570 left in the account at the end of the plan year, so it's important to carefully estimate your contribution amount.