Business and Personal Finance Dictionary

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• FLEXIBLE SPENDING ACCOUNT
  
  Some employers offer flexible spending accounts, sometimes called cafeteria plans, as part of their employee benefits package. You contribute a percentage of your pretax salary, up to the limit your plan allows, which you can then use to pay for qualifying expenses, including medical costs that aren't covered by your health insurance, child care and care for your elderly or disabled dependents. The amount you put into the plan is not reported to the IRS as income, which means your taxable income is less. However, you have to estimate the amount you'll spend before the tax year begins. And if you don't spend it all, you forfeit any amount that's still in your account at the end of the year.
  
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