Year-End Checklist: Get the Most from Your FSA in 2025

Before the year wraps up, take a closer look at your Flexible Spending Account (FSA). Whether you’re planning ahead or trying to make the most of remaining funds, a few smart moves now can help you avoid leaving money on the table.

With the FSA contribution limit rising again to $3,400 for 2026, now’s the time to review what’s covered, how to plan ahead, and what to do if you still have funds to spend.

What is a Flexible Spending Account?

An FSA lets you set aside pre-tax dollars to pay for certain out-of-pocket medical expenses. Since contributions aren’t subject to federal income tax, Social Security tax, or Medicare tax, you get more value from every dollar spent. FSAs are available through employers and can be used for a wide range of healthcare needs.

Maximizing Your FSA Contributions

1. Know What’s Covered

Eligible FSA expenses include a broad list of medical, dental, and vision costs, such as:

• Doctor visits, co-pays, and deductibles
• Dental and orthodontic work
• Prescription glasses and contact lenses
• Over-the-counter health products like sunscreen, pain relievers, and allergy medicine
• Medical devices and equipment, including CPAP machines and blood pressure monitors
• Mental health services and counseling
• Fertility treatments and related medications

Always confirm with your employer or FSA administrator to ensure specific items are eligible under your plan.

2. Plan Your Contributions Wisely

Before open enrollment, estimate your annual healthcare spending. Think about recurring prescriptions, planned procedures, or new healthcare needs for the upcoming year. Overestimating can leave you scrambling to spend at year-end, while underestimating means missing out on tax savings.

3. Don’t Forget Employer Contributions

Some employers contribute to your FSA, helping your funds go further. If your spouse also has an FSA, each of you may contribute up to the maximum: $3,200 in 2025.

Using or Losing It: What to Do with Unspent Funds

FSA balances generally don’t roll over indefinitely. Depending on your plan, you may have a grace period or a limited carryover amount.

• For 2025 funds: You can carry over up to $680 into 2026.
• If your plan doesn’t allow carryover: Consider using remaining funds before year-end for eligible expenses or appointments.

Smart Last-Minute Moves:

• Stock up on eligible over-the-counter items and prescriptions.
• Schedule dental, vision, or physical therapy visits before December 31.
• Refill prescriptions or purchase new glasses or contacts.

Conclusion: Plan Now, Save Later

FSAs can be a powerful tax-saving tool when used strategically. As the new year approaches, review your eligible expenses, estimate next year’s medical costs, and double-check any remaining funds before they expire. Small adjustments now can mean significant savings—and fewer year-end surprises.

For more information, see IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, or contact Smith Patrick CPAs to review your healthcare and tax-saving options.