Flexible spending accounts (FSAs) are a great workplace benefit: You can set aside pre-tax money to pay for medical care, which lowers your taxable income and reduces the effective cost of your medical expenses.
However, FSAs have a tricky rule to follow: The money you deposit in your FSA must be spent in the same plan year. Here's what you need to know about this rule, plus some of the best things you should spend your FSA funds on.
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Don't forget about the FSA use-it-or-lose-it rule
While FSAs are a great workplace benefit, they do come with a catch. You have to decide how much to deposit into your FSA at the start of the year and spend it all in the same plan year. Unlike your contributions to a health savings account, the money will not roll over to the following year.
That said, there are two exceptions to the use-it-or-lose-it rule that some employers offer. Your plan may allow you to carry over a small amount of unused funds (the IRS set a $660 limit on this carryover portion for 2025). And other plans may offer a short grace period, so if your plan year ends Dec. 31, you may have until February or March of the following year to use your FSA money.
Not all employers offer these options, however, so it's generally best to spend the money in your flexible spending account by the end of your plan year. With 2026 fast approaching, you may have hard-earned contributions sitting in your FSA that you're unsure how to spend.
Things you can buy with your FSA money before the deadline
FSAFeds.gov has a list of the many products and services you can spend your FSA money on before the year is over. While you can check that guide for a complete list of everything you can purchase, here are some of the best things to buy that most households will be able to use:
- Prescription medications
- Over-the-counter medications, including cold medicine, allergy and sinus medicine, antacids, and aspirin or other pain relievers
- Contraceptives
- COVID testing supplies
- Vaccines, including flu shots
- Hand sanitizer
- Contact lenses and solution
- Hearing-aid batteries
- Emergency medical kits
- Acupuncture or chiropractic care
- Massage therapy
Of course, you can also use FSA funds for medical visit copays, eye exams, and dental care. If you've been putting off going to your doctor or getting your teeth cleaned, you should schedule those appointments before your plan year ends.
Remember, you may have multiple tax-advantaged accounts that you contribute to each year, including a 401(k), IRA, and FSA. Just as you need to invest the money in the retirement accounts to get the most benefit out of them, you can avoid wasting any of the funds in your FSA by stocking up on important medical supplies and scheduling preventative care.
