Typically this time of year I might send out a reminder to spend up your FSA money, as it was always ‘use it or lose it’. However, IRS notice 2013-71 provides for a $500 carry over into the next year. You might find that you are still being bombarded with emails saying ‘Spend your FSA money now or you may lose it!’ emphasis mine…
It is important to check with HR as this carryover for the FSA requires an opt-in election on behalf of your employer. If they haven’t elected to do this then you may lose it; that’s the ‘may’ part of the advertising spiel.
If your HR is on vacation and you just don’t know, it may be safer to spend up your funds. That said, I would imagine most decent sized firms have taken this election already – so it is an educated guess on your part on how to act. If you actually need to buy things then go for it, if not, try to find out if you have the carry-over.
The list of things you can buy with FSA allocated money is very large, here’s a shopping page from Walgreens that lists a lot of options. Personally I have tended to buy contact lenses in bulk at year end if I need to burn through a lot of money (though I wouldn’t buy them at Walgreens!)
An FSA is not to be confused with an HSA (Health Savings Account), which is a very powerful retirement tool. Learn more about them here: Do you need an HSA?
The post Don’t forget to check with HR about your FSA! appeared first on Saverocity Finance.
Continue reading...