If you get heath insurance from your employer, you can probably take advantage of a flexible spending account (FSA) to cut your taxable income and lessen the impact of medical bills that sting you throughout the year. The way things usually work is to require you to commit a dollar figure to the account, then use the money to pay medical bills as they arise. Since the money comes out of your check, you’re never taxed on the amount.
The downside is you typically lose unused FSA funds when the year ends. If you’ve currently got money left in an FSA, you’ll want to do your best to spend it before Jan. 1. It’s also smart to use your medical expenditures this year to determine how much to put in next year.
HSA, FSA, and the Cost of Being Healthy [Her Every Cent Counts]
Last-minute moves to cut your taxes [MSN Money]