Roughly 35 million American households set aside money in a flexible spending account this year, and a sizable chunk of them are about to hand it back to their employer.
Use-it-or-lose-it rules mean any balance left in a healthcare FSA when the plan year closes simply vanishes.
The exact deadline depends on your employer's plan, but a large share of companies run on a calendar-year schedule.
That puts the cutoff at December 31 for many workers, with only a grace period or a small carryover cushioning the blow for some.
The math explains why this is worth an evening of your time.
FSA contributions come out of your paycheck before federal income tax, Social Security, and Medicare are applied.
If you're in the 22% bracket, every $100 you spend through the account costs you roughly $70 in take-home pay.
The average household forfeits somewhere between $300 and $500 a year, according to benefits industry surveys.
That's not a rounding error for a family already stretching a grocery budget. **Where the Money Can Actually Go** You don't need a medical emergency to drain the balance.
Eligible expenses run wider than most people assume.
Over-the-counter medicine counts, and since the pandemic-era rules loosened, that includes pain relievers, cold medicine, and allergy pills without a prescription.
So do bandages, first-aid kits, pregnancy tests, and sunscreen with an SPF of 15 or higher.
A spare pair of glasses, prescription sunglasses, or a year's supply of contact lenses all qualify.
So does a new pair of prescription frames you've been putting off.
Cleanings, fillings, crowns, and even some orthodontia payments can be routed through the account.
If a kid needs braces, that's a five-figure expense you can pay with pre-tax dollars.
Less obvious items: breast pumps and lactation supplies, hearing aids, blood pressure monitors, and thermometers.
Insulin and diabetic testing supplies qualify too. **The Online FSA Store Shortcut** If you don't want to guess, retailers now label eligible products clearly.
The FSA Store exists specifically to sell only qualifying items, and major pharmacies like CVS and Walgreens tag shelves with FSA-eligible markers.
Amazon has a dedicated FSA and HSA storefront.
You can filter by category, and the site will flag items that qualify.
The IRS has a full Publication 502 list if you want to check something unusual.
A note of caution: vitamins and supplements generally do not qualify unless they're prescribed to treat a specific medical condition. **Two Things People Get Wrong** First, the deadline to spend is not always the deadline to file.
Many plans give you until March or April to submit receipts for purchases made during the plan year.
Check your administrator's rules before you panic.
Second, dependent care FSAs work differently from healthcare FSAs.
They cover day care, after-school programs, and summer camp, and they have their own separate limits and deadlines.
If you're still stuck with a balance and can't find anything to buy, a few plans allow you to roll a limited amount into next year, typically $640 for 2025.
But that carryover is not universal. **A Closing Thought** This is one of the few financial deadlines where the payoff is immediate and certain.
Spending the money on something you'll actually use beats forfeiting it to an accounting line item.
Final Thoughts
Set a reminder tonight, log into your benefits portal, and check the balance before the clock runs out.