Question

TAX PLANNING

Question 36 of 75.

HSA accounts are different from Flexible Spending Accounts (FSA) in that:

A.            HSA accounts allow contributions to be saved for the future and FSA accounts do not.

B.            FSA accounts allow contributions to be saved long-term, and HSA accounts do not.

C.            FSA accounts allow for medical expenses to be paid using pre-tax dollars and HSA accounts do not.

D.            HSA accounts allow for medical expenses to be paid using pre-tax dollars and FSA accounts do not.

Answer 1

The correct answer to this question will be option (a)  HSA accounts allow contributions to be saved for the future and FSA accounts do not. It is because an individual controls an HSA and allows contributions to roll over while FSAs are less flexible and do not allow contributions to be saved for long-term.

Option (b) is not correct because FSA accounts do not allow contributions to be saved for long-term. Options (c) and (d) are not correct because both FSA and HSA allow people to save for their medical expenses on a tax-advantaged basis by using pretax money to pay for qualified medical costs.