Flexible Spending Accounts: Use the Money Before You Lose It
Don't wait until next month. Let DailyFinance help you figure out how to avoid losing that money now.
The IRS has a helpful publication that lists what expenses are eligible and ineligible in a huge number of categories. In general, you can use flex money to pay for things that qualify as deductible medical expenses.
So, doctors' visits, hospital stays, and dental treatments are clearly eligible, as are prescription drugs. Eye exams and glasses or contacts are also popular items to drain flexible spending accounts. Because they can be pricey, many stores that sell eyeglasses run December specials to encourage people with leftover flex money to upgrade their eyewear.
For other expenses, though, it pays to take a close look at the rules.
Certain expenses that many people would associate with health and wellness -- including nutritional supplements, gym memberships, and weight-loss programs -- generally are not eligible for flexible spending account reimbursement. Cosmetic surgery and hair transplants might make you feel better, but they don't qualify. However, acupuncture and chiropractic treatments do. And in case you were hoping to count medical costs for your pets, think again. Veterinary fees don't qualify.
So before you go out and spend a bunch of money, be sure to check the list and make sure you'll be able to use your flexible spending account to get reimbursed. Shop wisely, and this could be one of those rare times when the old advertising line will be accurate: The more you spend, the more you'll save.
Follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger.