{"id":7460,"date":"2024-11-07T08:33:40","date_gmt":"2024-11-07T08:33:40","guid":{"rendered":"https:\/\/finderica.com\/use-your-flexible-spending-account-funds-by-end-of-the-year\/"},"modified":"2024-11-07T08:33:40","modified_gmt":"2024-11-07T08:33:40","slug":"use-your-flexible-spending-account-funds-by-end-of-the-year","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=7460","title":{"rendered":"Use Your Flexible Spending Account Funds by End of the Year"},"content":{"rendered":"\n
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Do you have a flexible spending account (FSA) for your health care needs? If you do, here\u2019s a friendly heads-up: You\u2019d better check and see how much money is left in it. You\u2019re starting to run out of time to spend it. Tick tock!<\/span><\/p>\n

FSAs are \u201cuse it or lose it\u201d accounts, so you lose any money you haven\u2019t used by the end of the year. However, there is a grace period. So, if you get to the end of the year and have money to spend, the Internal Revenue Service (IRS) actually allows up to 2.5 months as a grace period. Your FSA plan will cover you through March 15, 2025.\u00a0<\/span><\/p>\n

More from The SS:<\/strong> Our 11 Top Picks for Best Savings Accounts<\/p>\n

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When Insurance Falls Short\u2026<\/h3>\n

Unfortunately, insurance doesn\u2019t cover everything<\/em>. These resources<\/a> can help you manage those unexpected expenses.<\/p>\n<\/div>\n

What\u2019s a Flexible Spending Account, or FSA?<\/h2>\n

A flexible spending account lets you set aside pretax money for medical and dental care that insurance won\u2019t cover. Employers take money out of paychecks to fund the accounts, which are regulated by the IRS. A third party usually administers the accounts and handles reimbursements.<\/span><\/p>\n

This is important: <\/span>An FSA is different from an HSA<\/span>, a health savings account. An HSA <\/span>is also a tax-advantaged account<\/span> you and your employer can contribute to in order to pay for eligible medical expenses using pretax dollars.<\/span><\/p>\n

The main difference? You can only establish an FSA with your employer. This means your employer \u2014 not you \u2014 owns your FSA account. If you leave your job, you lose your FSA funds.<\/span><\/p>\n

The biggest advantage of an FSA is that all your funds are available immediately the day you enroll. Even though you haven\u2019t paid in yet, the full contribution amount you elected during open enrollment is accessible to spend on health expenses at the beginning of the year.<\/span><\/p>\n

In 2024, FSA account holders could <\/span>set aside $3,200 for the year<\/span>. In 2025, that amount jumps to $3,300.<\/span><\/p>\n

The biggest drawback to an FSA is the \u201cuse it or lose it\u201d factor, meaning you lose whatever money you don\u2019t use up by the end of the year.<\/p>\n

If FSA money is left in your account at the end of December, your employer can offer one of two options:<\/p>\n