Smart ways to spend your remaining FSA money before year-end deadline
If you have money left in your health care flexible spending account, it's time to use it or potentially lose it before the end of the year.
Nearly $3 billion in FSA funds are forfeited each year because people aren't aware they have a deadline to spend their money. While rules vary by employer, typically all FSA money must be spent by Dec. 31.
Charlene Rhinehart, a certified public accountant and personal finance editor with GoodRx, says now is the time to look at your FSA balance and plan out your spending on eligible expenses.
Rollovers and grace periods
It's important to understand how your company's plan works. Some employers allow you to roll leftover funds into the following year.
Other employers might offer a grace period into the following year to use the money.
"A grace period will give you extra time to use those dollars, typically up until two and a half months after the plan year ends," Rhinehart said. "But a rollover lets you set aside a certain amount of money from one plan year to the next."
For 2025, the maximum rollover allowed is $660. Employers can only offer either a grace period or a rollover option, but not both.
Qualifying expenses
You can use your FSA money for qualified expenses for either yourself, your spouse, or any dependents you claim on your taxes.
While you can't use FSA funds to pay your insurance premiums, you can use it to cover co-pays, deductibles and other out-of-pocket costs.
Many everyday health items also qualify, like over-the-counter cold and flu medications. In some cases, you can even use it to cover travel expenses if they're related to medical care, like bus or subway fare to get to an appointment.
Thinking about joining a gym in the new year? That could qualify, too, as long as your doctor provides a letter of medical necessity.
The Amazon FSA/HSA Store can help you shop for FSA-qualified products.
For a list of eligible expenses you can also visit the IRS website.
Rhinehart said if you wind up with more left in your FSA than you can use, consider adjusting your contributions for the following year.