Flexible Spending Accounts are a type of financial account set up by employers that is tax advantaged.

They can be set up through a plan called a cafeteria plan in the United States. The flexible spending accounts lets an employee take a part of their paycheck and put it in an account to pay for qualified medical expenses. The account is mostly used for medical type services and expenses. All money paid into the FSA is tax-free for all payroll tax fees.

A major drawback to Flexible Spending Accounts is that you lose it if you don’t use it within the plan year, which is usually synonymous with the calendar year.

Any unspent money from the FSA is lost to the employee and goes back to the plan administrator. This is usually called the “use it or lose it” rule.  If you have some left over FSA benefits for the year don’t lose them! Come visit Dr. Barbat at her Michigan Cosmetic Dental Office to discuss your options.