Flexible Spending Accounts Save Money, Pay Less in Taxes
What is a Flexible Spending Account (FSA)? Simply put, an “FSA” is an account to which you contribute money deducted “pre-tax” from your salary. You then use that money to pay for out of pocket medical care, deductibles, and over-the-counter items for yourself and for your family.
Exactly how can I save money? Let’s say you make $1,000 per pay period. If you contribute $50 per pay period, this would lessen your taxable income to $950. While you are reducing your taxable income amount (thereby paying less in taxes) you will also have access to the money in your Flexible Savings account. You can either use the convenient debit card when making your FSA purchases at any doctor’s office, drugstore or pharmacy or you can be reimbursed when you submit your claims to your administrator.
Three Types of FSAs for Members of NYCON
- Health Care Flexible Spending Account (HCFSA)
- Dependent Care Flexible Spending Account (DCFSA)
- Transit FSA