What is Flexible Spending Accounts (FSA) ?
‘Flexible Spending Accounts’ or FSAs are the kinds of salary accounts in the USA, wherein, an employee can set aside a part of their income for any kind of predefined qualified expenses.
As the deductions are applied to the gross income, it is also tax-efficient. However, whatever amount not used up by the end of the year is forfeited, which is a disadvantage to the employee.
Hence, employees generally plan beforehand and enroll for FSA knowing that there might be some expenditure in the coming months. It helps them save taxes as well as have the extra money when in need.