Employer-sponsored flexible spending accounts (FSAs) and transit accounts let you set aside pretax earnings to pay for eligible health care, dependent care or commuter expenses.

If your employer offers an FSA or transit account, take advantage of these benefits:

• Pre-tax contributions lower your taxable income.
• The full amount you elect to contribute is available to you the day your plan offering health care FSA or transit account starts. For dependent care accounts, only the amount contributed to-date is available for reimbursement.
• You can plan ahead for out-of-pocket expenses you know you'll have, such as orthodontia or other major dental work, eyeglasses and prescriptions.

Simple and convenient
With an FSA, pretax funds are deducted from each paycheck and automatically deposited into your account. You decide how much to contribute, tax-free, for the year.

When it's time to pay for eligible expenses, such as prescriptions, day care or a bus pass, you reimburse yourself tax-free from your account. Or, you may, if your employer chooses, have a debit card linked to the account.

Keep in mind that unused FSA funds don't carry over from year to year, so you should estimate your expenses carefully.