Flexible spending accounts (FSAs) are savings accounts reserved for out-of-pocket health care costs. They are offered through an employee benefit plan and allow you to use pretax dollars to pay for medical costs that insurance might not cover.
FSAs can save you money because they are funded with pretax dollars, but they are “use it or lose it,” meaning that if you don’t use the funds by the end of the year, they don’t roll over into the next. There is some flexibility, and employers may extend the deadline to use funds until March 15, but participants might want to aim for the end-of-year deadline to be safe. That means, come December, you should have a plan of how to maximize your FSA funds.
Not sure how to spend your remaining FSA dollars? FSA Store has thousands of items that are eligible, including first aid items, travel essentials, pain relief items, and much more.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.
Tip adapted from TurboTax