FSA Contribution Planner (2026)
Plan your 2026 health FSA election. Enter your expected medical, dental, and vision expenses to get a suggested contribution up to the $3,400 limit, your estimated tax savings, and a forfeiture-risk check.
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Electing the right FSA amount
A health FSA is simple in concept: you set aside pre-tax salary for medical costs, up to $3,400 for 2026 (IRS Revenue Procedure 2025-32). The hard part is the amount. Elect too little and you leave tax savings on the table; elect too much and the excess is forfeited at year-end — unless your employer offers the $680 carryover safety net.
The planner's rule is deliberately conservative: elect the smaller of your expected expenses and $3,400. An FSA punishes over-election (forfeiture) but never punishes under-election — you just pay the remainder with after-tax dollars as usual.
Worked example
Expected eligible expenses $2,500, 22% marginal rate, employer offers the $680 carryover:
| Step | Calculation | Result |
|---|---|---|
| Expected expenses | — | $2,500 |
| 2026 FSA limit | — | $3,400 |
| Suggested election | min($2,500, $3,400) | $2,500 |
| Est. income-tax savings | $2,500 × 22% | $550 |
| Carryover safety net | — | $680 |
| Out of pocket | — | $0 |
If her expenses instead totaled $5,000, the election caps at $3,400 (savings $748 at 22%), and $1,600 stays out of pocket. And if her actual spending came in at $2,000 against a $2,500 election, the $500 shortfall would be forfeited — minus up to $680 of carryover if her plan offers it.
Avoiding forfeiture
- List real, scheduled expenses first: recurring prescriptions, planned dental work, new glasses, expected copays. Known costs are the safe core of any election.
- Be honest about the fuzzy ones: "maybe I'll need physical therapy" is how forfeitures happen. Without a carryover, only elect what you're confident you'll spend.
- Check your plan's safety net: carryover (up to $680) or a grace period changes the risk math — confirm which, if either, your employer offers before open enrollment closes.
Data sources: IRS Revenue Procedure 2025-32 (2026 FSA limit and $680 carryover cap); IRS Publication 502 (eligible expenses). This page organizes public limit information — it is not tax or investment advice — "estimates only, not tax advice."
Frequently asked questions
What is the 2026 health FSA contribution limit?
For 2026, the IRS salary-reduction limit for health FSAs is $3,400 per employee (IRS Revenue Procedure 2025-32). If both spouses work and each has access to an FSA, each can elect up to $3,400 under their own employer's plan.
What does 'use-it-or-lose-it' actually mean?
Money you elect but don't spend on eligible expenses by the plan year's end is forfeited back to your employer — you can't get it back as cash. The IRS softens this in two optional ways your employer may or may not offer: a carryover of up to $680 into the next year, or a 2.5-month grace period to spend the balance. Neither is mandatory, so check your plan documents.
Can my employer really offer no carryover at all?
Yes. Carryover and grace-period rules are optional plan features — the employer chooses one, the other, or neither. If yours offers neither, every unspent dollar is forfeited at year-end, which is exactly why this planner defaults to the conservative election.
What expenses can I use FSA money for?
The IRS Publication 502 qualified-expense list: copays, deductibles, prescriptions, dental cleanings and orthodontia, vision exams, glasses and contacts, mental-health visits, and many over-the-counter medicines. Cosmetic surgery and general toiletries don't qualify.
How is the suggested election computed?
The smaller of your expected eligible expenses and the $3,400 cap. That's deliberately conservative: electing more than you'll spend is the only way to lose money in an FSA. If your expenses exceed the cap, the planner shows how much stays out of pocket.
Does an FSA save FICA taxes too, or just income tax?
Both. Contributions through your employer's cafeteria plan skip federal income tax and Social Security/Medicare taxes (about 7.65% combined on wages under the wage base) — one reason FSAs beat paying medical bills with after-tax dollars even at modest income-tax rates.
Estimates only, not tax or financial advice. Figures reflect the 2026 tax year. Verify important decisions with the IRS or a qualified tax professional.