Title: Americans Urged to Spend Remaining Flexible Spending Account (FSA) Funds Before Year-End
As the end of the year approaches, many Americans with Flexible Spending Accounts (FSAs) find themselves under pressure to utilize their remaining funds before December 31. FSAs are pre-tax funds specifically set aside for healthcare expenses, distinguishing them from Health Savings Accounts (HSAs), which carry over from year to year.
The fear of losing unspent FSA money is a common concern among employees. Technically, unused funds are returned to the employer, resulting in a significant number of accounts having money remaining at year’s end. In a 2019 analysis, it was discovered that 48% of FSA accounts had money forfeited, with an average amount of about $370.
One of the main advantages of FSA funds lies in their ability to boost spending power since they are considered pretax dollars, effectively increasing the amount individuals have to invest in necessary healthcare items. Retail giants like Amazon, Walmart, and the FSA Store are actively catering to this demand by offering an array of FSA-eligible products. These items include Covid tests, contact lenses, pain relievers, unpaid medical bills, dentistry expenses, fitness classes, air purifiers for medical conditions, ancestry kits for genetic testing, as well as health-related gadgets like the popular Oura Ring or massage gun.
To further maximize the utilization of FSA funds, experts advise individuals to file their taxes early, ensuring a quicker refund in 2023. This serves as an opportunity to receive a lump sum that can then be used for other financial goals or future healthcare expenses.
These guidelines not only shed light on how individuals can make the most of their FSA funds before the year’s end but also address common questions regarding the upcoming 2022 tax season. It is crucial for individuals to familiarize themselves with the FSA rules and options available to them to ensure they maximize the benefits offered by this flexible healthcare expense account.
In conclusion, by taking advantage of FSA-eligible purchases and planning ahead for tax returns, Americans can optimize their healthcare spending and potentially avoid losing unutilized funds. With the deadline closing in, now is the time to explore available options and make informed decisions that align with one’s healthcare needs as well as financial objectives.
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