Like most people, chances are you’ve been eagerly awaiting your FSA reimbursement check, which is sent in January each year. The good news is that many companies match or exceed the expense portion of your FSA dollars used toward educational expenses before expiration. You can also use these dollars as a pass to see a movie or browse the library at no cost with your friends!
Check out five ways to spend your FSA before they expire.
Who knew that you could spend your FSA dollars on cosmetic items? Most people don’t because they view the dollars as strictly medical, dental, and vision expenses. However, the IRS has a specific skin care category, including makeup. To clarify, the IRS says on cosmetics: Cosmetic procedures are not reimbursable by medical expense tax deductions. However, personal hygiene items such as cosmetics for your appearance are deductible. The distinction is that medical treatments benefit your health, whereas cosmetics have a more subjective value.
You can spend FSA dollars on movie tickets and snacks. To get the most out of this, you could invite friends over for a movie night and split the cost of the tickets and snacks between you. You can also use your FSA dollars for costumes for Halloween or other costume events. Just keep track of your expenses so you don’t spend more than you are allowed in one year. You might want to consider using a service like Concur, which helps employees easily track the expense portion of their FSA account throughout the year.
Many people are surprised that they can spend their FSA dollars on sleep aids. The IRS defines sleep aids: Sleep aids include items prescribed by a doctor, such as sleeping pills and sedatives and heat or other items to induce sleep. If you have a prescription from your doctor, you should find no issue using FSA dollars on a sleep aid product. In addition, the IRS does not have any restrictions on the amount of money you spend on sleep aids per year. The only stipulation is that you must have a prescription from your doctor.
You may be surprised that you can spend FSA dollars on breast pumps. They are defined as items designed to collect, store, and express the flow of breast milk, such as breast pumps and bottles. There is no limit on how many times you can use your FSA dollars to buy a brand-new or used breast pump. However, you will have to track how much you spent when it comes time for your reimbursement.
Fertility Tests and Pregnancy Tests
You may be surprised to hear that you can spend your FSA dollars on fertility tests and pregnancy tests. They are defined as items designed to diagnose the medical condition of infertility. This includes tests, items, treatments, and procedures carried out to determine if you have fertility problems. While you might not use your FSA dollars on a pregnancy test, you might opt to use them on fertility tests. You may even want to purchase a fertility test kit and have your friends help you!
While the federal government currently relaxes the rules for using FSA dollars on fertility treatments, breast pumps, and other health items such as an Rx card, beware of what your specific state’s FSA laws say. In some states, you may be able to spend only a certain amount each year on any item. Another issue people run into is that they spend their FSA dollars before they expire on something they could get reimbursed for via an actual healthcare provider.
If you want to use your FSA dollars on items that fall under the definition of skin care, movies, sleep aids, breast pumps, and fertility tests, then it should be no issue. In addition, the IRS allows you to use your FSA dollars on anything that falls under the definition of health-related expenses, like medical treatments and dental expenses. When in doubt, ask a tax professional for help. All the best of luck using your FSA dollars on items that will help you live a healthy lifestyle. While you can’t use this money for medical expenses, you might find another item to help you live healthier.