The end of the year is drawing near, which may mean you have some extra money to spend.
No, you didn’t read that wrong. Many Americans have money in their health flexible savings accounts that they need to use up before the end of the year.
FSAs, which are typically offered as a benefit through your employer, give you the option of putting money directly from your paycheck, tax-free, into an account to be used to pay for medical-related expenses throughout the year. The max contribution in 2020 was $2,750 per person.
Because these funds are not taxed, the savings can really add up. If you earn $50,000 a year and have a tax rate of 30%, TurboTax estimates that putting $2,000 in an FSA account will net you $600 in savings.
But unlike health savings accounts (HSA), which are generally used when you have a high-deductible health insurance plan and allow consumers to rollover their savings year after year, FSAs operate under a “use it or…