What is the primary benefit of using a Flexible Spending Account (FSA)?
A. To increase taxable income.
B. To reduce self-employment tax.
C. To avoid paying taxes on investment income.
D. To reduce taxable income when paying for medical expenses or child care costs.
Answer (1)
The primary benefit of a Flexible Spending Account (FSA) is to reduce taxable income when paying for medical expenses or child care costs. FSAs allow employees to use pre-tax income for these expenses, leading to tax savings. This makes healthcare and childcare more affordable. ;
