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A flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer in the United States.
Flexible Spending Account. A flexible spending account (FSA) is a tax-advantaged account offered by an employer so that employees can set aside part of their earnings to pay for qualified expenses. Monies deducted from employee earnings into an FSA account are not subject to payroll taxes, which results in savings for the employee.