A Flexible Spending Account (FSA) is an employer-sponsored account that lets you set aside pre-tax money from your paycheck to use on eligible expenses.

The two most common types are Health Care FSAs (for medical-related expenses) and Dependent Care FSAs (for childcare or dependent adult care expenses). FSAs are sometimes called “flexible spending arrangements.” They can save you money on taxes by using pre-tax dollars for costs you would have paid anyway with after-tax money.