If you have a flexible spending account through work, there's a decent chance you're sitting on a few hundred dollars that will evaporate at midnight on December 31.
Unlike a 401(k) or an HSA, an FSA is a use-it-or-lose-it arrangement, and most employers only give you until the end of the calendar year to spend what you set aside.
Here's the catch that trips people up every winter: you already made that money disappear from your paychecks.
The IRS lets you contribute pre-tax dollars, which lowers your taxable income all year.
Skip the spending and you've effectively donated your own cash back to your employer.
No refund, no rollover, no apology email.
Some plans offer a grace period that pushes the deadline into mid-March.
Others allow a carryover of a limited amount into the next plan year, a figure the IRS adjusts periodically.
Your HR portal or benefits administrator is the only reliable source for which version you have, so check before you assume you're covered.
The good news is that FSA dollars cover more than most people realize.
Prescription glasses and contacts, dental work, therapy sessions, and a long list of over-the-counter items count.
So do things like bandages, pregnancy tests, heating pads, and sunscreen.
Online FSA stores from major retailers let you filter by eligible products, which beats guessing at the pharmacy counter.
If you're booking a dentist appointment or ordering new lenses in late December, the expense has to be incurred before your deadline, not just paid.
A receipt dated January 2 won't count against last year's account.
If your plan uses a debit card, keep the receipts anyway, since administrators sometimes ask for documentation months later and can claw back the funds if you can't produce it.
One more wrinkle worth knowing: if you switched jobs or your employer changed plans mid-year, your old account may have a different deadline than the new one.
People juggling two accounts in the same year sometimes miss the earlier cutoff entirely and lose the balance.
A simple move right now is to log in, find your remaining balance, and list every medical expense you've already paid out of pocket this year.
You can often submit those receipts for reimbursement even if you paid months ago.
That's frequently the fastest way to drain an account without buying anything you don't need.
Our take: an FSA is a great deal only if you spend it, and a quiet tax on forgetfulness if you don't.
Set a phone reminder for early December, not New Year's Eve.
Final Thoughts
Fifteen minutes of paperwork beats writing off several hundred dollars you already earned.