Why Does Your FSA Money Vanish on Dec 31?

Tens of millions of Americans have pre-tax money in a Flexible Spending Account with a hard deadline: December 31, 2026. Unspent dollars do not return to you — they go back to your employer. This video explains the 2026 health FSA limit ($3,400), the $680 carryover cap, the carryover vs grace period choice, the day-one rule, the dependent-care FSA jump to $7,500, and how an FSA differs from an HSA. Sources: IRS Revenue Procedure 2025-32 (2026 health FSA limit), IRS Notice 2013-71 (carryover rule), IRS Notice 2005-42 (grace period). The 2027 limit discussed in this video is a Mercer projection, not an IRS announcement. CHAPTERS 0:00 The ticking money in your paycheck 0:31 What is an FSA? 0:54 Pre-tax dollars — this year only 1:17 The 2026 numbers: $3,400 limit 2:24 The generous day-one rule 3:12 Why "use it or lose it" exists 3:38 The open-enrollment trap 4:09 $800 in December: three endings 4:48 What you can spend it on 5:29 Dependent-care FSA jumps to $7,500 6:11 FSA vs HSA in 60 seconds 6:44 The 2027 projection (not official) 7:12 Final word DISCLAIMER: Educational content only — not financial, tax, or legal advice. Do your own research or consult a qualified professional before making financial decisions. #FSA #UseItOrLoseIt #PersonalFinance #OpenEnrollment #CashClarity