If you have a flexible spending account through work, there's a decent chance a chunk of your own money is sitting in it right now, quietly running out of time.
Unlike a bank account, an FSA doesn't wait for you.
Use it or lose it, with a few narrow exceptions.
The catch is that most people don't spend evenly across the year.
You front-load expenses in January, forget about the account by spring, then panic in December when you realize several hundred dollars is about to vanish.
It came out of your paycheck, pretax, a little at a time.
So when it expires, you're not losing a bonus.
You're losing wages you already earned. **How much are we talking about?** For 2024, the health FSA contribution limit sits at $3,200.
Dependent care FSAs go up to $5,000 per household.
Those aren't small numbers, and surveys have repeatedly found that a large share of account holders forfeit at least some of their balance each year.
That forfeited cash doesn't go back to you.
Employers can use it to offset the cost of administering the plan.
Which means the deadline isn't just a paperwork nuisance.
It's a real transfer of money out of your pocket. **The deadline rules trip people up** Here's where it gets confusing, because there isn't one single deadline.
There are three, and your plan picks which ones apply.
The first is the plan year end, often December 31.
The second is a grace period, which some employers offer, letting you spend leftover funds for up to two and a half months into the new year.
The third is a carryover, where a limited amount, $640 for 2024, rolls into the next plan year.
Not every plan offers a grace period or a carryover.
So the only way to know your actual cutoff is to check your plan documents or call your benefits administrator.
Guessing here is expensive. **What actually counts as an eligible expense** A lot more than people assume.
Over-the-counter medications have been eligible again since 2020, no prescription required.
That includes pain relievers, allergy pills, cold medicine, and menstrual products.
Beyond that: bandages, first aid kits, contact lenses and solution, eyeglasses, prescription sunglasses, hearing aids, crutches, blood pressure monitors, thermometers, and fertility-related expenses.
Dental work, copays, deductibles, and coinsurance all count too.
Dependent care FSAs are a different bucket.
They cover daycare, before and after school programs, day camp, and certain elder care costs so you can work. **A quick way to burn the balance** If the clock is short, start with things you'll definitely use.
Replace worn eyeglasses or order contacts.
Schedule that dental cleaning or eye exam before the cutoff.
Buy eligible items through your plan's online store if it has one, since those purchases are pre-verified.
Spending $200 on random eligible products to save $60 in taxes isn't a win.
It's a worse trade than forfeiting. **Our take** The FSA deadline is one of the few money deadlines where inaction has a guaranteed cost, and it lands during the most distracted month of the year.
Set a calendar reminder for two weeks before your cutoff, log into your account, and check the balance.
If there's money left, spend it on something real.
If your plan offers a carryover, confirm the amount so you're not guessing.
Final Thoughts
A ten-minute check now beats finding out in January that your paycheck money expired.