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Way to Spend Your FSA

A Flexible Spending Account (FSA) [3] can be a great way for you to save up money to pay health care costs, while at the same time receiving a tax benefit. When a FSA is offered, you usually put in up to $5,000 a year, pre-tax. This lowers your taxable income, while providing you with an account to draw on when paying for prescriptions, medical care, or making co-pays.

However, a FSA doesn’t roll over; you use the money in the account, or you lose it. Some FSA plans require you to use all the money up by December 31 (if that’s your plan, you better hurry), while others give you until March 15 to use up the money. This “grace period” can make it easier to use your money more effectively, and to get in for appointments. You don’t want to lose your money, so it’s time to make a concerted effort to spend the money in your FSA:

Doctor Visits

Now is the time to schedule doctor visits. This is especially true if you have hit your deductible for the year. Use the money in your FSA to pay for the visit. Visits for yourself and your dependents can be great this time of year — especially if you have a complaint. Don’t wait to have that headache checked, or your teeth cleaned. Dentist visits and eye doctor visits can be paid for with FSA money as well. So, if you’re due for any sort of check up or cleaning, get it scheduled. This can be especially helpful if your health plan doesn’t cover vision or dental.

Have Work Done

If you’ve been waiting to have your child’s wisdom teeth [4] out, or to have that mole removed, now is the time to complete these procedures. Use your FSA money to pay for work that you’ve been wanting to have accomplished. You’ll take care of the problem before it gets any worse (and more expensive), and you’ll be able to use your hard-earned cash to your advantage.

Buy Needed Supplies

It’s a great time to stock up on the things you need. Update your glasses with your FSA money. Purchase more contact solution. Stock up on cough syrup and pain relievers. If you need specific health care items to treat a condition, you can buy these as well. This is a great way to use up the money in your FSA. However, you do need to be aware of recent rule changes to how this is accomplished. If you want to use your FSA money to pay for over the counter drugs, you now need a prescription to do so. Talk to your doctor about a script so that everything is in order.

Bottom Line

Your FSA can be a great financial tool that helps you better manage your health care costs (just don’t mix it up with the HSA [5]). However, the money doesn’t stick around forever. Whatever you don’t use by the deadline designated by your employer’s plan disappears. So, double check the deadline for using the money in your FSA, and make a plan to use it all up so you receive the maximum benefit of your tax deduction, and your health care dollars.

(Photo: jasleen_kaur [6])