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 with an expiration date attached.
Use-it-or-lose-it rules mean unspent funds can legally disappear after the plan year closes.
With December 31 looming for most calendar-year plans, this is the season when millions of American workers scramble to spend down balances they forgot they had.
Here's the frustrating part: you funded that account with pre-tax dollars taken out of every paycheck, which lowered your taxable income all year.
Then inflation made everything cost more, the money sat there, and now you're racing the clock.
The average employee contributes somewhere in the $1,000 to $2,000 range, and surveys consistently find that a meaningful share of accountholders forfeit at least some of it.
The good news is the rules give you more wiggle room than most people realize.
Many employers offer a grace period of up to two and a half months into the new year, or let you carry over a limited amount, which the IRS set at $640 for 2025.
Your plan might offer one, both, or neither, so check your benefits portal before assuming anything.
The eligible list is longer than the bandages-and-aspirin stereotype.
Prescription glasses and contacts, dental work, therapy sessions, prescription medications, insulin, menstrual products, sunscreen with SPF 15 or higher, first-aid kits, breast pumps, and even some over-the-counter medicines now qualify without a prescription thanks to a 2020 law.
A quick trip to a drugstore FSA-eligible aisle can wipe out a stubborn balance fast.
If you buy online, the charge has to hit your card before the deadline, not just the order date, and reimbursements require submitting receipts in time.
Some retailers like Amazon, Walmart, and Walgreens run FSA stores that flag eligible items automatically, which cuts down on rejected claims later.
First, don't buy stuff you'll never use just to zero out the account, since that defeats the purpose.
Second, don't confuse an FSA with an HSA.
Health savings accounts roll over year after year with no deadline, so if you have one, you can breathe.
The scramble only applies to the flexible spending side.
If you're staring at a balance and short on time, book that dental cleaning, refill prescriptions, restock the medicine cabinet, or schedule the eye exam you've been putting off.
You earned this money through payroll deductions all year.
Final Thoughts
Letting it evaporate at midnight is the one outcome nobody budgets for.