A flexible-spending account is usually set up by an employer to help employees pay for medical expenses that are not covered by health insurance (such as deductibles and co-payments). Employees can opt to have pre-tax dollars deducted from their paychecks and the employer keeps that money until the employee files a claim against the account.

You can track your regular contributions to a flexible-spending account using Money's Paycheck wizard. When you file claims, track them as withdrawals from this account.

How?

1  On the navigation bar (The strip at the top of the Money screen where you can click to go to the different areas in Money.), click Accounts.

2  At the top of the left pane, click the down-arrow  , and then click Account Manager.

3  At the bottom of the Account Manager, click New Account, and then follow the instructions on the screen.

Find out how much you have in your flexible-spending account, and use that amount as the opening balance. Be sure to choose Other as the kind of account, since you can't use the money in the account to finance your personal financial goals.

2  Make sure you have a copy of a paycheck that shows your regular account contribution, and then go to Set up Bills & Deposits.

How?

1  On the navigation bar (The strip at the top of the Money screen where you can click to go to the different areas in Money.), click Bills.

2  In the left pane, click Set up Bills & Deposits.

3  At the bottom of the list, click New.

4  On the first screen of the wizard, click Deposit and follow the instructions.

5  When asked to Enter details for this deposit, on the form, click Category and select Paycheck from the list.

Money starts the Paycheck wizard.

6  In the New Paycheck dialog box, click Yes, track taxes and other deductions, and continue.

7  In the Paycheck dialog box, click the Deductions Before Taxes tab. Enter Transfer as the category for this deduction, and then choose your flexible-spending account in the subcategory box. Enter the amount of your deduction for each paycheck.

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How can I view my account contributions over time?

Go to the Categories & Payees place. Double-click the flexible-spending accounts category, and then click Go to Category. To create a report of the transactions in this category, double-click the chart above the transaction list, and then click Create a Report.

How does a flexible-spending account figure into my income tax deduction?

You cannot claim an income tax deduction at the end of the year for expenses reimbursed through flexible spending accounts. This means you must choose between the tax deduction and the account for each expense. Generally, flexible spending accounts benefit people who don't itemize deductions or whose health-care expenses are not a large enough percentage of income to qualify for a deduction.

What happens to the money left in my flexible-spending account at the end of the year?

Any money left cannot be rolled over into the next year and will be forfeited. Be sure to only set aside money you know you will use during the year to avoid forfeiting unused flexible-spending account money.

How do I create an account?

How do I schedule a recurring deposit?

How do I itemize a paycheck deposit?

Tell me about customizing reports and charts.