Last Chance! Maximize Your 2024 FSA Funds: What to Buy Before Time’s Up!
As you gear up for the upcoming year, consider harnessing the power of Flexible Spending Accounts (FSAs) to tackle your medical expenses. These accounts allow you to contribute pre-tax dollars to pay for essential healthcare costs, making them a smart choice for budgeting. Just keep in mind: you typically need to spend your FSA funds by the end of the year, so make your plans now!
If you’re looking at a hefty FSA balance as we approach the close of 2024, don’t fret! A wide array of items and healthcare services qualify for FSA spending—many of which might surprise you. Think batteries for your medical devices, comfy earplugs, yoga mats for your zen sessions, or even sunscreen for those sunny days!
Stay with us to discover all the ways you can utilize your FSA funds before the clock strikes midnight on 2024, and find out if you can roll any leftover funds into 2025. Plus, dive into the latest changes to Medicare for 2025 and expert advice on setting achievable fitness goals for the new year!
The countdown is on—spend your FSA dollars before time runs out!
What’s the Deal with Flexible Spending Accounts?
Flexible Spending Accounts, often called FSAs, are part of employer-sponsored “cafeteria plans” that let you set aside tax-free funds from your paycheck for specific expenses. While there are various types of FSAs, health FSAs are the most common, allowing you to cover medical and dental expenses not paid for by insurance.
At the start of the year, you’ll choose how much you want to contribute to your FSA, and your employer will deduct portions from each paycheck. For 2023, the maximum contribution is $3,200, and it bumps up to $3,300 in 2025. Some employers might even add funds to your FSA as a perk, but remember, those contributions don’t alter your limit.
Typically, you submit claims to your employer to get reimbursed for eligible costs, although many companies now offer debit cards linked to your FSA for direct purchases.
Can I Roll Over FSA Money Into 2025?
Most FSAs operate on a “use it or lose it” basis, meaning any leftover money at year-end returns to your employer, but there are a couple of exceptions. Recent changes to FSA regulations allow employers to offer either:
- A grace period of 2.5 months (until March 15, 2025) to use your FSA funds
- The option to carry over up to $640 from your 2024 balance to your 2025 account
If your employer allows carryover, remember that this does not affect your maximum contribution limit for the following year.
It’s crucial to check with your HR department or FSA administrator to understand your company’s specific policies regarding FSAs.
What Can You Spend Your FSA Money On?
From doctor visits to prescription medications, your FSA funds can cover a multitude of medical needs. But that’s just the tip of the iceberg—here’s a glimpse of some lesser-known eligible items and services:
Over-the-counter medicine: Thanks to recent legislation, many OTC medications, including cold and flu remedies or pain relievers like ibuprofen, are now FSA-eligible. Stock up on first-aid kits and supplies too!
COVID-19 items like face masks are now covered under FSA!
Dental and vision care: Your FSA can cover essential dental treatments such as braces or wisdom teeth removal, as well as vision needs like prescription glasses and contact lenses.
Hearing aids: Need a boost in your hearing? FSA funds can be used for hearing aids and the batteries that power them.
Preventive screenings: Keep your health in check by using FSA dollars for annual screenings like mammograms, blood tests, or cholesterol checks.
Pregnancy-related expenses: From pregnancy tests to fertility treatments, FSA funds can assist with many aspects of family planning.
Mental health services: Therapy sessions, psychiatric care, and mental health medications can all be funded through your FSA.
And that’s just scratching the surface! From fitness classes to certain alternative therapies, there’s a wide range of products and services eligible for FSA spending.
What Can’t I Buy with FSA Funds?
While FSAs offer a wealth of possibilities, there are some expenses that won’t qualify. Here’s a quick list of what’s off-limits:
- Cosmetic procedures
- Over-the-counter medications (unless recently eligible)
- Insurance premiums
- Weight-loss supplements
- General health and wellness products (like shampoo or deodorant)
For more insightful tips on saving money, don’t miss our guides on snagging cheap airfare and maximizing your Social Security benefits for retirement.
