2023 – 11/28 – Don’t forget to empty out your flexible spending account

If you have a tax-saving flexible spending account (FSA) with your employer to help pay for health or dependent care expenses, it’s a good time to review 2023 expenses. A pre-tax contribution of $3,050 to a health FSA is permitted in 2023. This is increasing to $3,200 for 2024. To avoid forfeiting your health FSA funds because of a “use-it-or-lose-it” rule, you must make eligible medical expenditures by the last day of the plan year (Dec. 31 for a calendar year plan), unless the plan allows an optional grace period. Like health FSAs, dependent care FSAs are also generally subject to a use-it-or-lose-it rule. They generally have a $5,000 maximum annual contribution. Other rules may apply.


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