In some cases, spending more money now could help you save money later.
As the year winds down, it’s a good time to recap whether you still have FSA dollars you can spend on qualified health-related items. Or maybe you’ve already met the deductible on your health plan for the year, which could make it less expensive to have certain procedures now rather than next year.
Either way, don’t miss a chance to squeeze in some extra health spending this year if it will help you in the long run.
Wait, back up. What’s an FSA?.
If your employer offers a health plan, you can set aside pretax money from your paycheck in an FSA (flexible spending account) to use on eligible healthcare costs. (You could contribute up to $2,600 to an FSA in 2017, but some people choose not to contribute that much.)
Unlike contributions to a health savings account (HSA), you typically have to use FSA money within the year you set it aside or else you lose it. Some employers may give you up to 2½ months the following year to use the money or let you carry over up to $500 for the following year, but they’re not required to give you either option.
7 ways to use up the last of your FSA dollars before they go away.
Generally speaking, you can use your FSA dollars on the qualifying medical expenses listed in IRS Publication 502. Here are some ideas for how to spend it before the deadline to spend your FSA money arrives.
1. Eyeglasses and contact lenses. If you have a whopping $1,000 still to spend and no clear way to spend it, maybe it’s your chance to get those designer frames you’ve always (never) wanted.
2. Surgery for medical purposes. If you’ve always wanted 20/20 vision, laser eye surgery could be an option. Or maybe you’ve been postponing surgery on a balky knee. Consider whether it’s worth tackling this year or next.
3. Hearing aid. This could be a sound idea.
4. Acupuncture. Tell friends you’re on pins and needles.
5. Bandages. Stock up.
6. Stop-smoking program. You can’t use an FSA for nicotine gum or patches, but you can use FSA money for a program to quit smoking. If a stop-smoking program is something you’ve been meaning to do and you have FSA dollars to use, maybe this is a good excuse to finally do that.
7. Vasectomy. Yep, this is on the IRS list of things you can use FSA money for.
8. Braces. If you have FSA dollars to spend on braces for you or an eligible dependent, that could be something to smile about.
Things to Consider:.
- An FSA can be a valuable benefit – if you’re able to use up the money you put into it before your deadline to spend it.
- Check whether your employer gives you a grace period to use up any leftover money before it disappears from your account.
- Review your budget to adjust what you put into your FSA for the coming year.