Depending on your needs, you may decide to participate in one or more accounts. Since your total FSA contribution is taken from your pay before federal income taxes are deducted, your taxable income is reduced by the amount of your contribution. So, the more you contribute, the more you save.

First consider your health care spending. If you are enrolled in Options A or B, or enrolled in an eligible plan through another employer or exchange, consider your typical annual out-of-pocket medical, prescription drug, dental and vision spending. You could save money by paying for things like copays, coinsurance and prescription drugs with a Health Care FSA. For employees enrolled in Option C, you have the option of paying for medical, prescription drug, dental and vision care expenses with an HSA, but can further your savings on dental and vision expenses by adding a Limited Purpose FSA.

Next, consider your dependent day care expenses. Any employee can contribute to a Dependent Care FSA, which can be used to pay for eligible child and adult care services, such as child or adult day care, after-school care, au pair or nanny services, camp, or disability care. Consider contributing enough to cover your estimated expenses, up to IRS maximums.