Health Care FSA
A Health Care FSA allows you to set aside dollars from your pay on a pre-tax basis to reimburse yourself for qualified medical, dental, and vision expenses.
The Health Care FSA contribution limit is $3,200 for 2024. Once you enroll and set your annual contribution, you cannot change that amount during the year (except in the case of certain qualified life events).
With the Health Care FSA,
you can roll over up to $640 if you elect to continue contributing to the Health Care FSA,
so it's important that you carefully estimate your anticipated eligible expenses for the coming year.
Wondering what the difference is between a Health Savings Account (HSA) and Health Care FSA? Find out.
Dependent Care FSA
A Dependent Care FSA may be used to reimburse yourself for qualified child and dependent care expenses. You may use this account without being enrolled in medical coverage.
The Dependent Care FSA contribution limit is $5,000 (or $2,500 if you are married and filing taxes separately) for 2024. Once you set your annual contribution when you enroll, you cannot change that amount during the year (except in the case of certain qualified life events).
And, with the Dependent Care FSA, you lose any unused money at the end of the year, so it's important that you carefully estimate your anticipated eligible expenses for the coming year.
Things to Consider
When deciding whether to enroll in FSAs, be sure to consider the following:
Tax savings
Do you have moderate to high health care or dependent care expenses? If so, an FSA could help reduce how much you pay in taxes.
Your expected expenses
Carefully estimate your anticipated eligible expenses for the coming year. You should only set aside FSA dollars you know you will be able to use on eligible expenses.