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Key Tips to Avoid Forfeiting Your FSA Funds

As the year comes to a close, the pressure mounts for flexible spending account (FSA) holders to use their funds wisely. With the December 31 use-it-or-lose-it deadline looming, a staggering $3 billion goes unspent annually. To prevent this, FSA Store has outlined three pivotal actions all users should take today.

Understanding the FSA

An FSA is a valuable pre-tax account offered through employer-sponsored benefits that allows individuals to set aside funds for qualified medical expenses. The contributions, subtracted from paychecks before taxes, lower a person's taxable income. Given their tax advantages, FSAs are a strategic way to save money on healthcare spending. However, understanding the intricacies of these accounts is essential to maximize their benefits.

1. Know Your Deadline

Most FSAs come with a firm spending deadline, often falling on December 31. If unspent, these funds may be forfeited, which leads many users to panic as the deadline nears. To avoid losing your hard-earned money, it’s crucial to be aware of this timeline. Some employers might allow grace periods—up to two-and-a-half months—or carryover options for up to $660 in unused funds. Be sure to check your specific plan details to avoid any unwelcome surprises.

2. Check Your FSA Balance

It’s vital to monitor your FSA balance regularly. Recent reports indicate that while the average contribution sits near $1,300, nearly 50% of FSA users forfeit a part of their funds, averaging losses of $400 annually per person. To avoid being part of this statistic, log into your FSA account portal or reach out to your plan administrator to assess your current balance. Additionally, tools available on FSAstore.com can assist users in tracking their spending and understanding available funds.

3. Plan Your Spending for the Remainder of 2025

Identifying what items and services are FSA eligible can significantly influence your spending strategy. The list is expansive, encompassing various clinical services and everyday products. Popular items purchased with FSA funds include:

• - High-tech gadgets: such as health and activity monitors or massage guns.
• - Telehealth services: offering virtual therapy or prescription solutions.
• - Over-the-counter medications: like allergy treatments or first-aid kits.
• - Skincare products: including dermatologically recommended sunscreens and moisturizers.

FSA Store even provides tools that allow users to categorize their purchases, shop by price to align with remaining funds, and view lists of top-selling products to ensure they are making the most of their accounts.

Maximizing Your FSA

FSA Store emphasizes the importance of planning your purchases and utilizing available resources. With tools designed to streamline the FSA experience, users can spend confidently, ensuring that they do not forfeit funds due to lack of awareness or mismanagement. Leveraging the store’s educational resources and customer service can help demystify eligible expenses, driving efficient use of your FSA funds.

In conclusion, with the end of the year fast approaching, it’s essential for FSA account holders to take proactive steps. By being aware of deadlines, checking balances, and thoughtfully planning expenses, users can protect their funds and maximize their tax-free savings effectively before it’s too late.