If you set aside money in a flexible spending account this year, the clock is running out.
These accounts let you pay for things like prescriptions, glasses, dental work, and copays with pre-tax dollars, which can save the average family a few hundred dollars a year.
But there's a catch that trips up millions of workers every December.
Unlike a bank account, an FSA is a use-it-or-lose-it arrangement.
Under federal rules, your employer can give you until December 31 to spend the balance, or it can offer one of two extensions: a grace period that pushes the deadline to March 15, or a carryover that lets you roll over a limited amount into next year.
The problem is that most people don't know which option their employer picked.
A quick call to HR or a look at your benefits portal will tell you whether you're on a hard December 31 deadline or have extra runway.
If you're unsure, assume the money is gone after New Year's and spend it now.
Eyeglasses and contacts are the classic move, and you can buy a spare pair or stock up on a year's worth of lenses.
Dental cleanings, fillings, and even some orthodontic payments qualify.
So do copays for doctor visits, therapy, and prescriptions.
You can also load up on eligible over-the-counter items without a prescription, thanks to a rule change a few years back.
Think bandages, thermometers, pregnancy tests, allergy medicine, and menstrual products.
Many drugstores label FSA-eligible shelves clearly, and Amazon and Walmart both have FSA storefronts that filter items for you.
One warning: don't buy stuff you won't use just to burn the balance.
If you're staring at a few hundred dollars you can't realistically spend, check whether your plan lets you submit receipts from earlier in the year that you never got around to filing.
Plenty of people pay out of pocket in January and forget to claim it in June.
Another smart play is scheduling care before the deadline.
A dental cleaning, an eye exam, or a dermatology visit that's already on your to-do list can soak up a chunk of the balance and count toward your deductible at the same time.
If you're still stuck, some plans allow you to use FSA funds for dependent care, though that's usually a separate account with its own rules.
And if you're changing jobs, note that you generally can't take the money with you.
The bigger picture is that an FSA only pays off if you estimate your yearly costs accurately.
Overfund it and you're racing the calendar every December.
Underfund it and you leave tax savings on the table.
The sweet spot is usually a conservative guess based on last year's receipts.
My take: the December scramble is a design flaw, not a personal failing.
If your employer offers a carryover, use it and stop stressing.
If it doesn't, spend the money on things you'd buy anyway, and next year, set your contribution lower.
Final Thoughts
A small refund beats a mad dash through the pharmacy aisle.