FSA Carryover Limit for 2024: All You Need to Know

Introduction

The flexible spending account (FSA) is a popular employee benefit that allows you to set aside pre-tax dollars to pay for qualified medical and dental expenses. FSA funds can be used to pay for a wide range of expenses, including doctor's visits, prescription drugs, and dental care.

One of the most important things to know about FSAs is that they have a carryover limit. This means that you can only roll over a certain amount of unused funds from one year to the next. For 2024, the FSA carryover limit is $610.

Why is the FSA Carryover Limit Important?

The FSA carryover limit is important because it helps to prevent you from losing unused funds. This is especially important if you have a high-deductible health plan (HDHP) that requires you to pay a large amount of out-of-pocket costs before your insurance coverage kicks in.

If you have an HDHP, you may be able to contribute up to $3,850 to your FSA in 2024. However, if you don't use all of your FSA funds by the end of the year, you will lose any unused funds that exceed the carryover limit of $610.

How to Use Your FSA Funds

There are a few things you can do to make sure that you use all of your FSA funds by the end of the year. First, keep track of your expenses throughout the year. This will help you to see how much money you have left in your FSA and how much you need to spend.

Second, try to use your FSA funds for expenses that you would otherwise have to pay for out-of-pocket. This will help you to get the most value out of your FSA.

Finally, if you have any unused FSA funds at the end of the year, you can consider using them to pay for over-the-counter medications, first aid supplies, or other eligible expenses. You can also consider donating your unused FSA funds to a qualified charity.

Common Mistakes to Avoid

There are a few common mistakes that people make when using their FSAs. Here are a few things to avoid:

• Contributing too much to your FSA. If you contribute more than the annual contribution limit, you will have to pay taxes on the excess amount.
• Not using your FSA funds by the end of the year. If you don't use all of your FSA funds by the end of the year, you will lose any unused funds that exceed the carryover limit.
• Using your FSA funds for ineligible expenses. If you use your FSA funds for ineligible expenses, you will have to pay taxes on the amount of the expense.

FAQs

Here are some frequently asked questions about the FSA carryover limit for 2024:

• What is the FSA carryover limit for 2024? The FSA carryover limit for 2024 is $610.
• What happens if I don't use all of my FSA funds by the end of the year? If you don't use all of your FSA funds by the end of the year, you will lose any unused funds that exceed the carryover limit of $610.
• Can I contribute more than $3,850 to my FSA in 2024? No, you cannot contribute more than $3,850 to your FSA in 2024. If you contribute more than the annual contribution limit, you will have to pay taxes on the excess amount.
• Can I use my FSA funds for over-the-counter medications? Yes, you can use your FSA funds for over-the-counter medications, provided that they are for a qualified medical expense.
• Can I donate my unused FSA funds to charity? Yes, you can donate your unused FSA funds to a qualified charity.

Conclusion

The FSA carryover limit is an important thing to be aware of if you have an FSA. By understanding the carryover limit and how to use your FSA funds wisely, you can make the most of your FSA and save money on your healthcare expenses.