If your company has an FSA, before the plan begins you must specify how much of your salary to convert into tax-free contributions. You can then take tax-free withdrawals next year to reimburse yourself for out-of-pocket medical and dental expenses and qualifying child care costs. Watch out, though,FSAs are “use-it-or-lose-it” accounts – you don’t want to set aside more than what you’ll likely have in qualifying expenses for the year.
Tax & Accounting Blog
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