If you just opened (or are about to open) an FSA during open enrollment, you know it's a smart money move, but you might not know how much you should set aside towards your FSA contributions. You've done your research and know that your employer offers flexible spending accounts, but maybe you don't know how to find your FSA allocation number. Perhaps you're sure how much you spent on health expenses last year. Or maybe you had the perfect allocation total last year, but life has changed since then. (That happens a lot!)
If this sounds like you, don't panic! You've already taken the first step and decided that you want to open an FSA. The next step is simple: use our FSA Calculator to determine the most optimal amount to allocate for your FSA contributions.
Calculate your FSA number
The best way to determine how much money you should allocate to your FSA is with our FSA calculator. The calculator asks you to input a variety of information, including your income and estimated expenses for each category. After you input your numbers, you're shown exactly how much you should allocate based on your estimates. You also learn how much you could save on taxes. For example, if you earn $45,000 per year and allocate $2,500 to your FSA for health care expenses, your estimated tax savings from your FSA is $812. But here's the deal — in order to use the calculator to accurately estimate your health care expenses, you need to have an idea of what those expenses will be. If you just went through a big life change or are a first-time FSA user, that might seem difficult. Luckily, it's not as hard as it seems.
A few important notes on FSA limits
Always keep the latest FSA contribution limits in mind — in 2025, you can contribute up to $3,300 (an increase of $100 over the $3,200 limit in 2024) and the maximum FSA carryover is $660 (up from $640 in 2024). A few more things to remember:
- The $3,300 limit for 2025 applies on a per FSA account basis. If you have an FSA and switch jobs mid-year, regardless of claims incurred, you can elect the full $3,300 in an FSA at your new employer.
- The carryover maximum is 20% of the current FSA maximum contribution amount (that will continue to increase as the contribution cap increases).
- The FSA limit is the same for those participating in the health plan as single as it is for those participating as family.
- If two spouses each have access to their own FSA through their own employer, they could each elect the maximum of $3,300 for a combined household set-aside of $6,600.
- The FSA limit does not include carryovers. If your employer offers a carryover of up to $640 in 2024, you could have an FSA with $3,940 in it ($3,300 + $640) in 2025.
- Limits only apply to pre-tax employee contributions. Employers may contribute to an FSA in excess of the employee contribution max of $3,300.
Expenses to keep in mind when deciding how much to contribute to your FSA
If you're a new parent…
Congratulations! If you're a new parent, your health care expenses will likely increase thanks to an uptick in doctors appointments and health-related items for your baby. In general, new parents should expect to increase their FSA allocation.
(Plus, this might be a great time to open a dependent care FSA to pay for eligible child care expenses.)
If you're recently divorced…
If you're recently divorced and don't have children, your health care expenses might decrease because you're only responsible for your own health care expenses now. The best way to find your allocation number is to review last year's expenses and calculate your new number based only on your own expenses.
However, if you're recently divorced and have children, your FSA allocation number might stay the same or even increase, depending on your custody arrangement. Also, if you're planning on paying for daycare for your children, it might be a good idea to open a Dependent Care FSA.
If you have a recent health diagnosis…
If you've recently received a health diagnosis and are unsure what your health care expenses will look like now, it might be a good idea to increase your FSA contributions. Even if you allocate an extra $50 per month, it might make a big financial difference throughout the year. Plus, you might spend some of the money on FSA-eligible products related to your diagnosis.
If you're a first-time FSA user....
Welcome to the club! If you're a first time FSA user, it might be challenging to find the perfect allocation number, but that's okay. Even if you only put $100 per month towards your FSA, you could save hundreds of dollars in taxes.
Do your best to calculate your contribution number based on last year's health expenses, but don't worry if it's a little low or high. Next year, you'll be able to calculate more accurately.
Bottom line
It's okay if you don't find your "ideal" FSA contribution number. The most important thing is that you're starting to save money in your FSA and prepare for your health care expenses. Your bank account will thank you.
As always, the information provided in this article should not be considered legal or tax advice. Please consult a licensed professional for appropriate advice given your individual situation.
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