Flexible spending account is an account that is maintained by your employer and you can make monthly contributions to your flexible spending account. Tax reduction is the primary benefit of a flexible spending account. When you set aside a monthly amount from your gross income before taxes, you are actually reducing your taxable income. The contributions are then used for specific purposes like medical expenses, education of children.
However, there are limits defined by the IRS regarding the amount of contributions an employee can make into a flexible spending account. The yearly contribution in a flexible spending account should not exceed $2750.
