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Flexible Spending Account (FSA)
An arrangement you set up through your employer to pay for many of your out-of-pocket medical expenses with tax-free dollars. You decide how much of your pre-tax wages you want taken out of your paycheck and put into an FSA. You don't have to pay taxes on this money. Your employer's plan sets a limit on the amount you can out into an FSA each year. There is no carry-over of FSA funds.