The IRS sets limits on the amount of money that can be contributed to a flexible spending account (FSA) each year. For 2025, the annual contribution limit for health FSAs is $3,050, and the limit for dependent care FSAs is $5,000.
FSAs offer several benefits, including tax savings and the ability to pay for qualified medical expenses with pre-tax dollars. However, it’s important to note that FSA contributions are made on a pre-tax basis, meaning that they are deducted from your paycheck before taxes are calculated. This can result in a lower taxable income and a corresponding reduction in your tax liability.
