How much can an employee contribute to a Flexible Spending Account (FSA) annually?

The correct annual contribution limit for a Flexible Spending Account (FSA) is determined by the IRS guidelines. For the year 2023, the limit is set at $2,850 for health care FSAs. However, this can also vary based on any adjustments made by the IRS.

In the context of this question, while $2,550 might have been the limit in previous years, the most accurate and current figure for the maximum contribution to an FSA aligns with the updated cap which is $2,850. Understanding these limits is crucial for employees as it affects their ability to plan their healthcare expenses and tax savings effectively.

Contribution limits are subject to revision, and being familiar with these amounts ensures that employees do not miss out on potential tax advantages related to these pre-tax payroll deductions. Therefore, the answer reflects the correct maximum contribution limit, providing clarity on how employees can utilize their benefits.