Skip to content
Get Good at Finance

How Much Should You Contribute

The plain answer

Section titled “The plain answer”

Contribute only what you expect to spend on eligible expenses during this plan year. An FSA can lower your taxes on spending you were already going to do. It can also forfeit leftover money if you overshoot.

For 2026, the healthcare FSA contribution limit is $3,400. The dependent care FSA figures in this site’s data are $7,500 generally, or $3,750 if you are married filing separately. Those dependent care amounts are not yet confirmed against IRS guidance, so check current IRS materials and your plan document before you enroll.

How it actually works

Section titled “How it actually works”

You elect an annual amount during open enrollment. Payroll then funds the account over the year. A healthcare FSA often makes the full election available early. A dependent care FSA usually reimburses only what has already been contributed.

Your employer’s plan may allow a healthcare FSA carryover of up to $680, a grace period, or neither. Carryover is not a reason to pad the election with costs you do not expect.

The tax savings are a percentage of eligible spending, not a refund of the spending itself. Do not elect an amount to chase a deduction on purchases you would not make.

What this means for you

Section titled “What this means for you”

List the eligible costs you can predict: copays, prescriptions, planned dental or vision work, or known childcare invoices. Ignore a best-case year you hope to have.

If the list is short, a smaller election is the safer trade. You can usually change the amount only after a qualifying life event, not because you guessed wrong in January.

Compare a dependent care FSA with the child and dependent care credit. The same expense generally cannot support both.

Common mistakes

Section titled “Common mistakes”
  • Electing the maximum because it is available.
  • Counting expenses that are not eligible under the plan.
  • Ignoring carryover, grace period, and claim deadlines.
  • Using last year’s dependent care limit without checking current IRS guidance.
  • Leaving a job with a large unused balance.
Section titled “Related pages”

Educational content, not personalized financial, tax, or legal advice. No affiliate relationships. Figures are for tax year 2026 and change annually.Read the full disclaimer.