HSA can equal sizable tax deduction

 

 

Investing in an HSA account can lower you tax liability. Not everyone is eligible though, and not  everyone may benefit. If you answer 'yes' to the following 2 questions, then chances are you can benefit from opening an HSA account.

  1. Do you plan on having out-of-pocket medical expenses next year? These are expenses that are not covered by your insurance or expenses that would go toward your deductible. Examples would be things such as eyeglasses, contact lenses, hearing aids, certain prescription drugs, etc. Expenses that do not qualify include medicines and drugs from other countries, cosmetic surgery, health club memberships and veterinary services.

  2. Are your deductibles between $1,350 and $6,650 (self-only) and/or $2,700 and $13,000 (family coverage)?

If you answered yes to both questions, you could invest the amount you estimate on paying in an HSA and deduct it on your income tax return. You can then withdraw from the account TAX-FREE as long as the money is used for medical expenses. Make sure what you contribute will be used for future qualifying medical expenses. If you withdraw money for any other purpose, you will have to pay income tax on that amount. There are limits (of course) to how much you can deduct. For individuals, the limit for the 2018 tax year is $3,450. For family coverage, it is $6,900. The 55 and older crowd gets an added bonus of $1,000 meaning a total deduction of $4,450 and $7,900, respectively.

Here are some of the top HSA providers and some comparison between them.

© 2023 by FinancialServices. Proudly created with  Wix.com

  • s-facebook
  • Twitter Metallic
  • Google Metallic
  • s-linkedin