Pay for it pre-tax

Most spending accounts let you choose how much money you want to set aside for health care, child care, and even commuter expenses. Then, that money can be taken out of your paycheck before taxes. This lowers your total income so you pay less income tax. 

Spending Account Types

Each spending account helps you save in a different way. Ask your employer about what kinds of spending accounts are available to you and keep exploring to learn more about each one.

Spending Account Comparison

HSA

HRA

FSA

Pay for deductibles/copays/coinsurance

Yes

Yes

Yes

Pay for dental/vision/prescription expenses

Yes

Yes

Yes

Pay for dependent care

No

No

Yes

Account owned by

You

Employer

Employer

Invest money for future expenses

Yes

No

No

Funded by

You **

Employer

You**

You are required to have a Qualified High-Deductible Health Plan

Yes

No

No

Money is transferable if you change jobs/change plans/retire

Yes

No

No

Can reduce your taxable income

Yes

No

Yes

Debit card available

Yes

Yes

Yes

*This may depend on whether your employer offers this option.
**In some cases, your employer may contribute. The IRS sets different limits on contributions to HSAs and FSAs.

Spending Account Comparison Video

Most spending accounts let you choose how much money you want to set aside for health care, child care, and even commuter expenses. Then, that money can be taken out of your paycheck before taxes. This lowers your total income so you pay less income tax.