FSA: Are contributions pre-tax dollars?

People will say FSA dollars are taken out of your paycheck before taxes. Yet, the FSA sends a statement at the end of the year for tax purposes; however, other pre-tax benefits do not. So, is FSA only pre-taxed once you file your taxes??? What’s the SD?

Definately pre-tax:

Not sure why you get a statement unless it is to show you how much of the FSA you actually used, as it is a “use it or lose it” program. That answer is probably employer specific.

I don’t get a statement from my flexible spending account but it shows up in box 12 on my W2. Contributions are considered pre-tax because they lower your taxable income. Let’s say you contribute $1000 and make $50k. The FSA money is taken out first so as far as the government is concerned you only made $49K and you owe them a little less income tax.

It depends on what you specify. For us, you have the option for either pre-tax or after-tax. You have to make your decision in the beginning of the year, and can’t change it.

Just about everyone specifies pre-tax. The only reason to choose after-tax I can think of is if you are in a situation where you get a lot of 1099 income during the year and thus want to have more money withheld so you don’t come up against the limits for not withholding enough.

I don’t think you have an FSA. It sounds like an HSA. Is the form 1099-SA and/or 5498-SA? Is the W-2 box 12 coded W?