Similar to health savings accounts (HSAs), the big benefits that healthcare-related flexible spending accounts (FSAs) provide are tax-free contributions and withdrawals for qualified medical expenses. Used properly, FSAs and HSAs offer a tax break on these expenses that is equivalent to whatever your tax rate is. Unlike HSAs, however, the big drawback to FSAs is that any contributed funds you do not use by the deadline set by your employer are forfeited back to your employer. In other words: use-it-or-lose-it. If lost contributions surpass the tax savings on spent funds, it is possible that you are net losing money on
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