Comment by alasdair_
7 years ago
Simple example:
My FSA card is pre-tax money to be used for healthcare expenses. Towards the end of the year, I ended up still having a balance that would go away if not used, so I bought things that I would not have otherwise purchased.
That's a bit different. You're effectively getting "taxed" 100% on whatever is left over so you might as well spend the money on anything that has non-zero value to you.
But if you, say, only lost 30% or 50% of the balance, it's not immediately obvious if you should spend the balance or not.
OT but this is such a weird aspect of FSAs. I can carry some amount over with my plan which makes things a lot easier.
From my experience, FSA's doing go away at the end of the year.