There's a deadline coming that most Americans ignore until the last week of December, and it costs them real money every single year.
It's the use-it-or-lose-it rule attached to flexible spending accounts, and if you have one through your job, the clock is already running.
An FSA lets you set aside pre-tax dollars for medical and dependent care costs.
The trade-off is strict: money you don't spend by the plan's deadline typically vanishes.
No refund, no rollover into your checking account, nothing.
Employers keep the leftover funds, which is exactly why so many workplaces offer these accounts in the first place.
Many plans follow the calendar year and require you to spend funds by December 31.
Others offer a grace period that pushes the date into mid-March.
Some allow a small carryover, often a few hundred dollars, into the next plan year.
Your specific rules live in your plan documents or your benefits portal, and guessing is a bad idea.
If you have a health care FSA, you can usually use the full amount you elected on day one, even before you've contributed all of it.
But you still have to spend it before the deadline.
If you have a dependent care FSA, you can only be reimbursed up to what you've actually contributed so far, which changes the math on what you can claim right now.
So what do you do with a balance that's about to evaporate?
Stock up on contact lenses, eyeglasses, and diabetic supplies.
Buy over-the-counter items your plan covers, which often includes bandages, pain relievers, allergy medicine, and menstrual products.
Many plans also reimburse sunscreen, first aid kits, and thermometers.
Then look at bigger-ticket items you've been putting off.
A new pair of prescription sunglasses, a dental cleaning you keep rescheduling, or a visit to a specialist can wipe out a few hundred dollars fast.
Some plans cover acupuncture, chiropractic care, and mental health counseling.
If you're not sure whether something qualifies, check the IRS list of eligible expenses or call your plan administrator before you buy.
A purchase made on December 31 usually counts, but a service you pay for in January does not.
If you're booking appointments, get them on the calendar now, because dental offices and eye clinics fill up in the final weeks of the year.
Submitting receipts also takes time, so don't wait until the last day to file a claim.
Be skeptical of texts, emails, or calls claiming your FSA funds are expiring and asking you to click a link or verify your account.
Your employer and your plan administrator already have your information.
Nobody legitimate needs you to confirm a balance through a random message.
If you can't spend the money in time, some plans let you submit expenses from earlier in the year that you never got around to claiming.
Dig through old receipts for copays, prescriptions, and glasses.
It's the easiest money you'll ever recover. **The bottom line:** An FSA is a genuine tax break, but only if you actually use it.
Treat the deadline like a bill that's due, because in a real sense, it is.
Final Thoughts
Spend an hour this week reviewing your balance and your options, and you'll likely save more than you'd earn from any holiday sale.