So your first step is to check with your benefits office to confirm your spending deadline, says Bart Turney, a vice president with ADP Strategic Advisory Services in Louisville, Kentucky.
If your workplace gives you until mid-March to incur FSA-eligible expenses and use this year's funds to pay for them, you have some breathing room.
Companies now also have the option of allowing employees to roll up to $500 in unspent FSA funds into the next benefit year.
However, both those choices are optional and at the employer's discretion. If your spending deadline is the end of December, start making doctor appointments and buying allowable medical items now.
Eligible FSA expenditures
The most common uses of FSA money are to pay insurance copays and exams that aren't covered under your insurance.
Vision exams are popular during this time of year. Most of us could use an extra pair of glasses or, for fun, prescription colored contact lenses. Don't forget about full dental checkups or even just teeth-cleaning appointments. Each of these expenditures could help you draw down your FSA.
Under many plans, FSA cash also can be used for alternative treatments, such as acupuncture or chiropractic sessions, that aren't typically covered by medical insurance.
It's also a good time to think about wellness exams and preventative procedures. "Anything you can do at the end of the year to help improve your overall health is a good use of account money," says Turney.
One easy wellness option is a flu shot, says Turney. Most pharmacies now offer these injections, so there's no need to make a special trip to your doctor's office.
Also consider cleaning out your medicine cabinet, says Turney.
"Throw out expired medications and replace them," he says. "Look at maintenance medication. Many people now get prescriptions in 3-month supplies." If you're able to refill those multimonth orders now (or by March 15), you can be reimbursed from FSA money.
In 2011, however, a former FSA benefit got less beneficial.
Previously, you could use FSA money to pay for over-the-counter medicines. That's still possible, but now a health care reform law provision requires that you get a doctor's prescription for over-the-counter treatments before you can file the expense as an FSA claim.
Overlooked FSA expenses
Some other expenses you might not have considered -- but that are usually allowed under FSA plans -- are first-aid kits, blood-pressure monitors, thermometers, and neck, wrist or other joint braces.
Check your store receipts when you buy medically oriented items. Many retailers include notations as to which purchases are FSA-eligible. You also should check with your benefits manager before you buy an item if you have any questions about its FSA eligibility.
And don't forget about the cost of getting to medical offices, says Turney. The tax code rules on medical mileage reimbursement apply to FSAs, too.
Allowable transportation costs include not only mileage or actual car expenses for travel primarily for and essential to medical care (you must use one travel reimbursement calculation method), but also bus, taxi, train or plane fare, or ambulance service and parking fees and tolls.
Just be sure you don't also count your travel costs as itemized medical deductions on Schedule A. Your FSA money is not taxed, and the IRS frowns on such tax-deduction double-dipping.