What can I spend my limited FSA on?
When it comes to managing your finances, Flexible Spending Accounts (FSAs) can be a valuable tool. However, with limited funds available, it’s essential to understand what you can and cannot spend your FSA money on. In this article, we’ll explore the various eligible expenses and help you make the most of your FSA benefits.
Eligible Medical Expenses
The primary purpose of an FSA is to cover eligible medical expenses. These include costs that are not typically covered by your health insurance plan, such as:
– Prescription medications
– Over-the-counter (OTC) medications with a prescription
– Contact lenses and solution
– Vision care services, such as eye exams and glasses
– Dental care services, such as cleanings, fillings, and braces
– Hearing aids and hearing aid maintenance
– Chiropractic services
– Acupuncture and other alternative therapies
– Preventive care services, such as vaccinations and screenings
Eligible Dependent Care Expenses
FSAs can also be used to cover eligible dependent care expenses for children under 13 or disabled dependents. These expenses include:
– Daycare services for children
– Before-and-after-school care
– Summer camp
– Adult day care for a disabled dependent
– Babysitting services for children or disabled dependents
Eligible Work-Related Expenses
In some cases, you may be able to use your FSA to cover work-related expenses. These expenses must be necessary for your job and not reimbursed by your employer. Examples include:
– Uniforms required for work
– Safety equipment required for work
– Mileage for work-related travel
– Home office expenses, such as a computer or phone
Important Considerations
While FSAs offer a great opportunity to save on eligible expenses, it’s crucial to be aware of some important considerations:
– FSA funds must be used by the end of the plan year or a grace period, if applicable. Any unused funds may be forfeited.
– FSA contributions are made with pre-tax dollars, which means you’ll save on taxes.
– It’s essential to keep receipts and documentation for all eligible expenses to ensure you can submit claims for reimbursement.
Conclusion
Understanding what you can spend your limited FSA on is key to maximizing your benefits. By familiarizing yourself with eligible medical, dependent care, and work-related expenses, you can make informed decisions and save money on out-of-pocket costs. Remember to keep track of your FSA funds and use them responsibly to ensure you don’t miss out on valuable tax savings.
