IRS Issues Guidance for Flexible Spending Account Plans

Starting Jan. 1, 2013, Flexible Spending Accounts, or FSAs, will have annual limits of $2,500per year. Going forward, the limit will rise annually based on the rate of inflation.FSAs allow workers to put aside money from their paycheck for health care expenses not covered by their health insurance. Because the money is pre-tax, whatever the amount of the contribution is deducted from the participant’s taxable income.

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