By using and FSA, you can reduce your taxable income, which experts note on average is about 25%-30% for healthcare spending paid out of a FSA.

Understanding FSAs

• This year the maximum contribution is $2,700. The employee’s spouse at his or her work has the ability to deduct up to $2,700 as well. Next year’s amount is most likely going to be at least $2,700.
• Most everyone has some medical expenses throughout the year.
• Money can be used to cover out-of-pocket expenses from their health insurance plan like copays and deductibles.
• You can use the money for a variety of additional expenses such as prescription drugs, eyeglasses/contacts or orthodontia.
• No, $2,700 probably won’t cover a child’s braces, but combined with a spouse’s $2,700 you should be in the ballpark.
• Employees also have the entire amount designated for their account available on January 1, even if contributions are spread throughout the year.