How to Maximize Your FSA Before Year-End

It’s the scenario nobody wants: you check your FSA balance in November and realize you still have $800 sitting there. The plan year ends December 31. If you don’t spend it, you lose it.

The year-end FSA scramble is incredibly common. Nearly 48% of FSA participants forfeit money each year, leaving a collective $4.6 billion on the table. That’s money that already came out of your paycheck — money you chose to set aside for health expenses. Losing it feels terrible because it is terrible.

But here’s the thing: most people forfeit money because they don’t realize how many things their FSA actually covers. The list of eligible expenses is much broader than most people think. Let’s fix that.

Step 1: Check Your Balance

Before you do anything, find out exactly where you stand.

• Log in to your FSA portal (your employer or TPA should have given you access)
• Check your available balance — this is what you have left to spend
• Check your plan’s deadline — is it December 31, or does your plan have a grace period or carryover?
• Review any pending claims — make sure submitted claims have been processed

Knowing your number is the starting point for everything else.

Step 2: Understand Your Deadline Options

Not all FSA plans work the same way at year-end. Your plan may offer one of these relief provisions:

The $640 Carryover Rule

Many plans allow you to carry over up to $640 (2026 limit) of unused Health FSA funds into the next plan year. If your remaining balance is $640 or less, you may not need to scramble at all — it rolls over automatically.

Check with your HR department or TPA to confirm whether your plan includes the carryover provision.

The 2.5-Month Grace Period

Some plans offer a grace period of up to 2.5 months after the plan year ends. For a calendar-year plan, that means you’d have until March 15 of the following year to incur eligible expenses using your remaining balance.

Important: It’s One or the Other

Your plan can offer a carryover or a grace period, but not both. And some plans offer neither — it’s strictly use-it-or-lose-it on December 31. Know which rules apply to your plan before you make spending decisions.

Step 3: Spend Down Your Balance Strategically

Now for the practical part. Here’s a prioritized approach to using your remaining FSA funds wisely.

Schedule Appointments You’ve Been Putting Off

The highest-value use of FSA funds is actual healthcare you need. Before year-end, schedule:

• Annual physical or wellness exam (copays and out-of-pocket costs are FSA-eligible)
• Dental cleaning or dental work — crowns, fillings, orthodontic payments
• Eye exam and new glasses or contacts — prescription eyewear is fully eligible
• Dermatologist visit — skin checks, mole removal, acne treatment
• Chiropractor appointments — covered for treatment of a medical condition
• Physical therapy sessions — if you have an ongoing issue
• Mental health therapy — copays for counseling and psychiatry visits
• Acupuncture — eligible when provided by a licensed practitioner

If you’ve been meaning to update your glasses, get a dental crown, or start physical therapy, now’s the time. These are expenses you’d pay for anyway — your FSA just makes them tax-free.

Stock Up on Eligible Over-the-Counter Items

Since 2020 (thanks to the CARES Act), over-the-counter medications and health products are FSA-eligible without a prescription. This opened up a huge category of everyday items you can buy with your FSA:

Medications:

• Pain relievers (ibuprofen, acetaminophen, aspirin)
• Allergy medication (Claritin, Zyrtec, Benadryl)
• Cold and flu medicine (DayQuil, NyQuil, Mucinex)
• Heartburn and digestive medication (Tums, Pepcid, Prilosec)
• Anti-itch and hydrocortisone cream
• Antibiotic ointment (Neosporin)
• Cough drops and throat lozenges

Health Products:

• Sunscreen (SPF 15+) — yes, sunscreen is FSA-eligible
• First aid kits and supplies (bandages, gauze, medical tape)
• Contact lens solution and cases
• Reading glasses and magnifying lenses
• Thermometers (standard and digital)
• Blood pressure monitors
• Heating pads and ice packs
• Compression socks and stockings
• Menstrual care products (pads, tampons, cups, liners)
• Hand sanitizer
• Acne treatment products (benzoyl peroxide, salicylic acid)
• Lip balm with SPF

Baby and Family:

• Baby health products (nasal aspirator, baby thermometer, diaper rash cream)
• Prenatal vitamins
• Breastfeeding supplies (breast pump, storage bags — though your insurance may already cover the pump)

Consider Larger Purchases

If your remaining balance is substantial, these bigger-ticket eligible items can absorb it quickly:

• Prescription sunglasses — $200–$500+ depending on frames and lenses
• A year’s supply of contacts — stock up now; they don’t expire for years
• CPAP supplies — replacement masks, tubing, and filters for sleep apnea treatment
• Orthopedic insoles and supports — custom orthotics are eligible with a letter of medical necessity
• Blood glucose monitors and supplies — if you or a family member manages diabetes
• Hearing aid batteries — if applicable

Use an FSA Store

If you’re not sure what’s eligible, online FSA stores make it easy. Websites like FSAStore.com and HealthMarketplace.com sell only FSA-eligible products. You can browse by category, use your FSA debit card directly, and know that everything you buy qualifies.

This is especially useful if you have a few hundred dollars left and just want to efficiently spend it on things you’ll use.

Step 4: Know What’s NOT Eligible

To avoid denied claims and wasted time, steer clear of these common mistakes:

• Cosmetic procedures — teeth whitening, cosmetic surgery, hair removal for non-medical reasons
• Gym memberships and fitness equipment — unless prescribed by a doctor for a specific medical condition (and even then, it’s difficult to get approved)
• Vitamins and supplements — general wellness vitamins are not eligible; only specific ones prescribed for a medical condition qualify
• Toiletries — toothpaste, shampoo, soap, and general hygiene products
• Cosmetics — even if they contain SPF (unless the primary purpose is sun protection)
• Insurance premiums — you can’t use your Health FSA to pay insurance premiums (that’s what a POP is for)

When in doubt, check the IRS Publication 502 list or your FSA administrator’s eligible expenses guide.

Step 5: What Happens to Unused Funds

If you don’t spend your balance and your plan doesn’t offer a carryover or grace period, here’s the reality: you forfeit the money. It goes back to the plan, and ultimately to your employer.

The forfeited funds can be used by the employer to:

• Offset plan administration costs
• Reduce future plan costs for participants
• Distribute to remaining plan participants (rare)

There’s no way to get the money back. No refund. No rollover to a different account. It’s gone.

This is why accurate estimation during open enrollment matters so much — which brings us to the final step.

Step 6: Plan Better for Next Year

The best time to prevent year-end FSA stress is during open enrollment. Here’s how to set a smarter contribution for next year:

Review This Year’s Actual Spending

Look at what you actually spent on eligible expenses this year:

• Medical copays and coinsurance
• Prescriptions
• Dental work (cleanings, fillings, crowns)
• Vision (exams, glasses, contacts)
• Over-the-counter medications and health products
• Any other eligible expenses

Add it all up. That’s your baseline.

Factor in Known Changes

• Are you expecting any procedures or treatments next year?
• Is anyone in your family starting orthodontics?
• Are you due for new glasses or contacts?
• Any recurring expenses (monthly prescriptions, therapy sessions, chiropractic visits)?

Apply the 80% Rule

Once you have your estimated annual health expenses, contribute about 80% of that number to your FSA. This gives you a cushion for overestimation while still capturing most of the tax savings. If your plan offers the $640 carryover, you can be slightly more aggressive since you have a safety net. For more on all eligible FSA expenses and maximization strategies, consult the complete list of FSA-eligible expenses for 2026.

The Math on Getting It Right

Setting your FSA contribution accurately is worth the effort. If you contribute $2,500 and use all of it, your tax savings at a 30% combined rate are $750. If you contribute $2,500 and forfeit $500, your net savings drop to $600 — still positive, but you left $150 in savings on the table through the forfeiture.

The goal isn’t perfection. It’s getting close enough that the tax savings significantly outweigh any risk of forfeiture.

Quick Reference: Year-End FSA Checklist

• Check your FSA balance and plan deadline
• Confirm whether your plan has a carryover ($640) or grace period (2.5 months)
• Schedule any medical, dental, or vision appointments you’ve been postponing
• Fill prescriptions for the coming months
• Stock up on eligible OTC medications and health products
• Order new glasses, contacts, or prescription sunglasses if needed
• Submit all outstanding claims and receipts before the filing deadline
• Save receipts for every FSA purchase (in case of audit)
• During next year’s open enrollment, use this year’s actual spending to set a smarter contribution

The Bigger Picture

An FSA is one of the best tax-saving tools available to employees. At a 30% tax rate, every dollar you put in your FSA is worth $1.43 in pre-tax earnings. But that math only works if you actually use the money.

The year-end scramble is avoidable. Know what’s eligible, schedule your healthcare proactively throughout the year, and estimate your contributions carefully during open enrollment. Your future self will thank you.

If you’re interested in maximizing dependent care benefits as well, see our guide to FSA-eligible expenses and learn about dependent care FSAs for childcare and eldercare.

Want to compare FSA, HSA, and HRA options to find the best fit? Check out our FSA vs HSA vs HRA Comparison Tool to see which account type makes the most sense for your situation.

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This guide is for informational purposes and does not constitute tax or legal advice. Consult with a qualified tax professional or benefits advisor for guidance specific to your situation.