When times are tough, wasting money is the last thing you want to do. But every year, U.S. workers end up losing hundreds of millions of dollars because they forget about the funds they wisely set aside for health-care and dependent-care expenses.
About 85% of employers offer flexible spending accounts to their employees. With a health-care FSA, you can arrange to have pre-tax money taken out of each paycheck that you can use later for doctor bills, prescription drugs and other qualifying medical expenses. Similarly, a dependent-care FSA lets you pay for day care or babysitting with pre-tax dollars.
The benefit of an FSA is obvious: Using pre-tax dollars to pay for those expenses can save you a fortune over the course of a year.
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