Tax Benefits of Health Savings Accounts Lure Consumers, Businesses
A family with a qualifying high-deductible health insurance plan in place no later than December 31 can shelter up to $5,650 from 2007 federal income taxes. By reducing your adjustable gross income, enabling you to pay for medical expenses with pre-tax income, and through tax-deferred growth, HSAs can reduce your income taxes in at least 10 ways.
Fort Collins, CO (PRWEB) December 10, 2007 -- Many people are rushing to get a Health Savings Account in place before the end of the year in order to lower their 2007 taxes. These tax-favored accounts, which have only been available since January of 2004, can be opened by anyone with a qualifying high-deductible health insurance plan. Once you open an account, you can place tax-deductible contributions into it, which can then be used later to pay medical expenses. Any money not used grows tax-deferred, like an IRA.
Health Savings Accounts offer many tax advantages over traditional health insurance arrangements. Here are 10 ways Health Savings Accounts offer tax savings:
1) Reduce your federal income taxes. Regardless of your income level or how your income was earned, any money you deposit into your Health Savings Account is considered an "above-the-line" deduction, giving you a 100 percent write-off against adjusted gross income.
2) Reduce your adjusted gross income, helping you to qualify for other lucrative tax breaks tied to overall income.
3) Reduce your state income taxes. All states except four (AL, CA, NJ, and WI) offer a tax deduction for Health Savings Accounts.
4) Tax-deferred growth. Like funds in an IRA, the money in your account grows free from federal taxes.
5) Pay for dental expenses with pre-tax dollars.
6) Pay for vision care with pre-tax dollars.
7) Pay for alternative care with pre-tax dollars, including chiropractic, acupuncture, homeopathy, ayurvedic medicine, herbal medicine, or any number of other so-called alternative treatments.
8) Pay for aspirin, bandages, cold medicine, and other household medical expenses with pre-tax dollars. A list of HSA qualified expenses is available from HSA for America at: http://www.health--savings--accounts.com/qualified-expenses.htm
9) Pay Medicare expenses with pre-tax dollars, including Medicare premiums, deductibles, copays and coinsurance.
10) Pay for long-term care insurance with pre-tax dollars.
A Health Savings Account (HSA) enables anyone with a qualifying high-deductible health insurance plan to shelter up to $5,650 from federal income taxes. HSA-qualified health insurance must be in place by December 31, 2007, in order to benefit your 2007 tax return. By reducing your adjustable gross income, enabling you to pay for medical expenses with pre-tax income, and through tax-deferred growth, HSAs can reduce your income taxes in at least 10 ways.
About HSA for America:
HSA for America is a nationwide brokerage firm specializing in individual and family health insurance plans that are qualified to work with Health Savings Accounts. HSA for America represents many different insurance companies, offers instant quotes, online applications and comparisons of independent HSA administrators. Visit us online at: http://www.health--savings--accounts.com
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