In 2024, individuals can contribute a maximum of $3,050 to a Health FSA, which reduces taxable income and can lead to tax savings. However, the Health FSA is a use-it-or-lose-it plan, meaning that any unused funds by the end of the year will be lost. The carryover amount for 2024 is set at $640, and the deadline to submit claims is April 15, 2025.
To maximize the benefits of this contribution method, it’s important for participants to carefully monitor their expenses and use the funds allocated to them within the deadlines. By taking advantage of the tax savings offered by the Health FSA and using funds effectively, individuals can reduce their overall healthcare costs and save money on taxes.