While you might think spending your Health Savings Account (HSA) is the only option, saving your HSA provides additional benefits that you might be unaware of.
- An individual who has a high Deductible Health Plan, and no other plan including Medicare, can contribute up to $3,500 for single coverage and $7,000 for families as a deduction from their 2019 taxable income.
- Your contributions can grow tax-free as long as your future distributions are for qualified medical expenses. As such, an HSA has the advantage of a traditional IRA in that your contributions reduce your tax liability in the current year, while also gaining the benefits of a Roth IRA in that your deductions are not taxes as well (as long as they are for qualified medical expenses).
- This double tax elimination provides superior after-tax results over an IRA, 401k plan or 529 education plan.
- Don’t confuse an HSA with a Flexible Spending Account as an FSA account requires you to spend distribute the funds in the year it is funded.
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Information herewith is directed toward U.S. residents only. K-Mack Financial, LLC is registered as an investment adviser with the State of Florida and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. K-MackFinancial, LLC does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.--