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Benefits Beginner:
Flexible Spending Accounts
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Choose wisely. There is only one correct answer to each question.
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1.
When estimating how much to contribute to a medical flexible spending account, consider _______.
Choose wisely. There is only one correct answer.
Your medical and dental expenses from last year
What expenses you might incur this year
Both A and B
Neither A nor B
Both A and B. Both of these options will give you an idea of how much you will need to set aside.
2.
When you fund a flexible spending account, your employer takes those funds out of your pay _______.
Choose wisely. There is only one correct answer.
On an after-tax basis
On a before-tax basis
After taking out Social Security tax, but not income taxes
None of the above
On a before-tax basis. This means that FSA funds do not incur taxes as they are taken out.
3.
When you fund either a medical or dependent care flexible spending account, you can carry funds over from one year to the next with no limit.
Choose wisely. There is only one correct answer.
True
False
False. IRS rules do not allow this beyond a certain limit, which often rises year to year.
4.
A health FSA can be used to cover over-the-counter medication costs.
Choose wisely. There is only one correct answer.
True
False
True.
5.
If your employer allows you a grace period to use your flexible spending account funds, then you must use your funds by _______.
Choose wisely. There is only one correct answer.
December 31 of that year
January 1 of the following year
Two and a half months after the calendar year ends
Six months after the calendar year ends
Two-and-a-half months after the calendar year ends. This is a grace period allowed by the IRS.
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