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Photo: fizkes (Shutterstock) A recent study revealed 50% of people with Flexible Spending Accounts (FSAs) are fuzzy on the details of the “use it or lose it” part of these tax-saving vehicles—particularly the deadlines for the funds in them must be spent. This year more than ever, that’s not exactly surprising: COVID relief legislation added in new, overlapping extensions that made FSA spending even more flexible—and certainly more confusing. Here’s what you need to know about spending your 2021 funds and planning for next year. FSAs are a little less “use it or lose it” for 2021 FSAs —untaxed healthcare spending accounts provided by your employer—typically offer only one of two following options for any unused funds you have left over at the end of a given year: You can roll over up to $550 to the next year. You can take advantage of a 2.5 month grace period to spend the remaining funds. However, COVID relief legislation in 2020 created an additional option that allowed employees to carry over all of their unused money from 2020 into 2021, for both healthcare and dependent care FSAs. This means that in 2022 you might need to spend all of your remaining FSA funds from both 2020 and 2021, or risk losing it all—so you’ll definitely need to calculate your rollover balance before you decide how much to have taken out of your paychecks next year. Adding to the muddle, the American Rescue Plan Act of 2021 also allowed employers to […]