![]() In your HSA, earnings from interest and investments are tax-free. Many people with HSAs don’t take advantage of this benefit, but it has the potential to be a key component of your financial planning. If you bought a traditional healthcare plan your annual deductible may be lower, but you would have to pay for it, and other medical expenses, with after-tax money. There are myriad qualified expenses, including co-pays, prescription drug costs, and your deductible. HSA distributions for qualified healthcare expenses are tax-free. As you contribute money over the years you won’t be hit with tax bills along the way, so you can continue building up a nest egg for later in life. This makes HSAs a great tool to save money for the long-term, including for retirement. That’s an additional $220 in tax savings. ![]() If you’re over 55 and not yet enrolled in Medicare, you can contribute an additional $1,000 per person, per year. For example, if your tax rate is 22 percent, and you contribute the maximum amount for 2022, which is $3,650 for an individual, $7,300 for a family, you could save $803 and $1,606 respectively, in tax payments. Starting at age 65 you can spend your HSA funds on anything, without a penalty.īenefit 1: They have a triple-tax advantage.HSAs are also a great way to grow your money and save for retirement. But that’s not the only benefit of having an HSA. That is a huge benefit as you plan to pay for qualified medical expenses. We’ve already talked a little bit about how HSAs are triple tax-advantaged. Need-to-know info on HSA contributions and distributions.Tax forms associated with having an HSA.There are also limits as to what is considered to be a qualified medical expense. There are annual limits to how much you may contribute to your HSA. This refers to the fact that contributions to your HSA are tax-deductible, funds in your HSA grow tax-free, and qualified distributions are also tax-free. HSAs are considered to be triple tax-advantaged. These two are paired because the contributions you make to your HSA are supposed to help you cover your deductible and other out-of-pocket medical expenses that are typically higher with high deductible health plans than with traditional plans. Good news: There are only a few extra forms you need to know about when filing your taxes.Ī health savings account (HSA) is a tax-advantaged savings account that you may open and contribute to if you are enrolled in a qualified high deductible health plan (HDHP). If you have an HSA, you may be wondering what additional tax forms you’ll need to know about come April 18th. Read the full announcement on the IRS website. On Januthe IRS announced that taxpayers who reside in or have a business that was impacted by severe winter storms, flooding, and mudslides in California beginning January 8, 2023, now have until May 15, 2023, to file various individual and business tax returns and make tax payments. The tax deadline to file 2022 taxes is April 18, 2023.
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