![]() ![]() With an HDHP, all non-preventive care - including prescriptions - is subject to your plan deductible.At the time you contribute to an HSA, you must have a high deductible health plan as your only health insurance plan, unless you qualify for one of the exceptions outlined in the IRS guidelines.Many HSAs also offer investment options with the potential for investment earnings on the funds in your account.The ability to keep your HSA funds could allow you to save for a larger deductible plan in the future, which can help you save on premiums.HSA funds remain with you if you change jobs 4 or retire or are no longer enrolled in an HDHP.Any funds you don’t spend remain in the account for the future and don’t count against the contribution limits for future years. ![]() An HSA is not a “use it or lose it” account.Tax-free withdrawals for money spent on qualified medical and dental expenses HSAs are referred to as providing “triple tax savings”: Subject to IRS limits, you may be able to further reduce your taxes by adding additional funds to the account, on top of any automatic deposit from your paycheck. In other words, it reduces the amount of taxable income on your paycheck, but you still have that money available in the HSA to spend on qualifying expenses. The money going into the account is taken out of your paycheck on a pretax basis, which reduces your tax liability. Many people choose an HSA because of the tax advantages.If you’re self-employed, you can buy an individual HDHP and contribute to an HSA too. You don’t have to get your health plan from an employer in order to have an HSA. Not all plans with these deductibles are HSA-qualified, though, so be sure to check with your health plan or employer. For 2019, your health plan must have an out-of-pocket maximum of $6,750 (individual coverage) or $13,500 (family coverage) and a deductible of at least $1,350 (individual) or $2,700 (family). ![]() 3 You can’t be enrolled in Medicare, and you can’t be able to be claimed as a dependent on anyone’s tax return. To be eligible for an HSA, you must have a high deductible health plan (HDHP), which has to be your only health insurance plan (the IRS states specific exceptions for this rule, including coverage for specific diseases or illnesses, accidents, and disabilities). What are eligibility requirements for an HSA? 2 You can use funds in your HSA to pay for qualified medical expenses now or in the future, even if you change jobs or retire.
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