Sometimes called Flexible Spending Arrangements, FSAs are an arrangement through your employer that lets you pay for many out-of-pocket medical expenses like copayments, deductibles, and some prescriptions, with tax-free dollars.
You decide how much to put in an FSA, up to a limit of $2,650 per year per employer. If you’re married, your spouse can put up to $2,650 in an FSA with their employer too. You aren't taxed on this money. If money is left at the end of the year, the employer can offer one of two options (not both):
- You get 2.5 more months to spend the left over money.
- You can carry over up to $500 to spend the next plan year.