FSAs save you money. The contributions you make to an FSA are deducted from your pay check on a pre-tax basis – before federal income, social security, and most state taxes. The end result of your FSA contributions is a lower taxable income, and a tax advantaged vehicle to pay for out-of-pocket healthcare expenses.
There’s really no reason to forgo an FSA. Everyone has some type of out-of-pocket healthcare expenditures – thus, an opportunity to save! FSAs help you:
- Reduce taxable income – Contributions lower your reported annual income, resulting in lower taxable wages
- Save on healthcare expenses – Using pre-tax funds to pay out-of-pocket healthcare expenses can save you money
- Offset rising healthcare costs and individual financial responsibilities