Flexible Spending Accounts

Flexible spending accounts (FSAs) allow an employee to contribute a predetermined percentage of pretax pay to an account that he or she can then use to pay for qualifying expenses. Depending on the type of FSA, those expenses might include childcare or medical costs that aren't covered by health insurance. At the end of the plan year, any unspent money in an FSA is forfeited.

Health Care Flexible Spending Account

You have access to the entire election amount on January 1st of each plan year, even though the dollars have not been deducted from your paycheck yet. You must have a qualifying medical expense to gain access to the funds, and your deductions will continue to come out of your paycheck on a weekly or monthly basis throughout the remaining plan year.

Learn more about the Health Care Flexible Spending Account (FSA).

Dependent Care Flexible Spending Account

You must have already had the dependent care services occur before the day you submit for reimbursement and have the dollars available in your dependent care account to be reimbursed. Your deductions will continue to come out of your paycheck on a weekly or monthly basis throughout the remaining plan year.

Learn more about the Dependent Care Flexible Spending Account (FSA).

Keep Your Receipts

A good rule of thumb is to keep itemized receipts with dates of service, type of service received, and name of the person receiving services, as well as other supporting documentation related to your expenses and reimbursement requests, on hand. The IRS may request itemized receipts to verify select expenses. Credit card receipts, canceled checks, and balance forward statements do not meet the requirements for acceptable documentation.