Most companies offer their employees some sort of flexible spending account. A flexible spending account (FSA) lets you pay less money in taxes by enabling you to spend pre-tax dollars on certain health and dependent care expenses. You can have a specified amount of money taken out of each paycheck and set up in an account. This money is taken out before taxes, so at the end of the year, your salary is less, and you have less taxes taken out. The money set away in your FSA can be used for many out-of-pocket medical costs. Every company’s policy is different, but most flexible spending accounts can be used to pay for: contact lenses, glasses, prescriptions, doctor visit co-payments, out-of-pocket dental expenses, and over-the-counter medications. If you anticipate having medical expenses in the near future, enrolling in a FSA would be a wise decision.
Most companies allow you to enroll at the end of the year (usually November) or upon being hired. The only caveat is that if the money in your FSA is not used up within the year you are enrolled, the money is forfeited. This means it is very important to accurately estimate how much money you want taken out of your paycheck over the course of the year.
