FSA (Flexible Spending Account)
An employer account letting you pay for medical or dependent-care costs with pre-tax dollars. The catch: most of it is use-it-or-lose-it each year.
By Findley's Finance · Last reviewed: September 2026
Why it matters
The FSA cuts your healthcare and childcare bills by your tax rate — money goes in pre-tax and comes out tax-free for eligible expenses. But unlike the HSA, unspent money mostly vanishes at year-end, so only contribute what you will actually spend. If your employer offers both an HSA and FSA, the HSA usually wins for anyone who can invest the balance.