On October 22, 2024, the IRS announced that the limit on employees\u2019 salary reduction contributions to a health Flexible Spending Account (FSA) will increase to $3,3000 for plan years beginning in 2025.\u00a0 This is an increase from the 2024 limit of $3,200.\u00a0 By understanding the latest contribution limits, individuals can better plan for 2025 and see how the new limits can enhance tax savings.<\/p>\n
What is an FSA?<\/strong><\/p>\n An FSA is a tax-advantaged savings account that allows you to set aside pre-tax dollars to pay for eligible medical expenses. This can help you save money on your tax bill and reduce your out-of-pocket healthcare costs.<\/p>\n Key Points to Remember:<\/strong><\/p>\n How to Maximize Your FSA Benefits:<\/strong><\/p>\n Why Are FSA Contribution Limits Higher for 2025?<\/strong><\/p>\n FSAs offer significant tax savings by letting individuals use pre-tax dollars for eligible medical expenses like copayments, deductibles, and prescription or over-the-counter medications. With the new 2025 limit of $3,300, participants can allocate even more toward healthcare costs, reducing their taxable income.<\/p>\n For FSAs that permit unused funds to carry over, the maximum carryover has risen to $660, which represents 20% of the new FSA limit. This adjustment aligns with the increased contribution cap, providing greater flexibility for managing healthcare costs from year to year.<\/p>\n","protected":false},"excerpt":{"rendered":" On October 22, 2024, the IRS announced that the limit on employees\u2019 salary reduction contributions to a health Flexible Spending Account (FSA) will increase to $3,3000 for plan years beginning in 2025.\u00a0 This is an increase from the 2024 limit of $3,200.\u00a0 By understanding the latest contribution limits, individuals can better plan for 2025 and […]<\/p>\n","protected":false},"author":1,"featured_media":1614,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[225],"tags":[241,222],"class_list":["post-1613","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-flexible-spending-account","tag-fsa-limit","tag-fsas"],"acf":[],"yoast_head":"\n\n
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