Flexible Spending Account (FSA)

FAS piggy bank

Do you have a Flexible Spending Account (FSA) with your employer? Make sure to take full advantage of it this year and in the new year. For 2021, the contribution limit remains at $2,750 (unchanged from 2020). If an employer permits, employees can carry over up to $550 of unused funds into 2022 (the carryover amount for 2020 was $500). Otherwise, FSAs have a “use or lose” provision. FSAs provide employees a way to use tax-free dollars to pay qualified medical expenses not covered by other health plans. Amounts contributed aren’t subject to federal income tax, Social Security tax or Medicare tax. If the plan allows, an employer can contribute to an employee’s FSA.

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