What Health Savings Accounts Can Do for You
Many people don't know about the great savings that can be had with a Health Savings Account.
HSAs are personal savings accounts to pay for normally deductible medical expenses i.e. contact lenses, glasses, eye exams, dental visits, etc. Advantages of utilizing an HSA include:
Contributions to HSAs are not subject to federal income tax
Distributions from the HSA to pay for medical expenses are tax-free
You control the money; can let it accumulate as you don't need to spend in the calendar year which you contributed
Some HSAs draw interest, also tax-free
For 2016, can contribute and take deduction for $3350 for self only, $6750 for family
Who qualifies? You need to have a high deductible health insurance ($1300 for single, $2600 for family), must not be participating in any other sponsored health savings accounts, i.e. FSA, cannot be claimed as a dependent nor on Medicare.