I urge everyone to fully fund their HSA if at all possible. Not only do you get an immediate tax break, but the money grows tax-deferred just like an IRA. And if you ever need the money to pay for a medical expense, you can withdraw it tax-free.
Fort Collins, CO (PRWEB) March 26, 2013
Individuals with a Health Savings Account have until April 15, 2013 to deposit tax free dollars into HSA accounts for the 2012 tax year. Individuals may deposit up to $3,100 and couples can deposit $6,250 total into an HSA account. Any deposited funds will be an “above the line” tax deduction for your 2012 taxes. Individuals 55 and older my contribute an extra $1,000.
This money is available to spend tax free on qualified medical expenses such as going to the doctor, purchasing prescription drugs and paying other expenses toward a deductible.
"A lot of people with HSA-qualified health insurance plan miss out on hundreds or even thousands of dollars in tax breaks, because they fail to fully fund their HSA," says Wiley Long, president of HSA for America. "I urge everyone to fully fund their HSA if at all possible. Not only do you get an immediate tax break, but the money grows tax-deferred just like an IRA. And if you ever need the money to pay for a medical expense, you can withdraw it tax-free."
What are some other qualified medical expenses?
These include dental expenses, mental therapy, physical therapy, alternative treatments such as nutritional consulting, transportation and lodging expenses, preventative health programs, fees incurred by handicapped individuals, maternity expenses not covered through your insurance and your insurance premiums paying for qualified long-term care (See our Long Term Care page for more information.) Click here for a full list of HSA qualified medical expenses.
Some things to remember when filing.
Remember that over-the-counter drugs can no longer be bought with HSA money without a doctor's prescription. Insulin is an exception to that rule. You can find a complete list of what your HSA can cover at http://HSAforAmerica.com/hsa-info.htm#tax2.
When filing taxes, HSA administrators should send IRS form 1099-SA and Form 5498-SA. Make sure these forms are sent into IRS before the end of May.
And, remember, HSA money can be used after retirement to pay for health care with tax-free dollars.
About HSA for America
As the nation's leading independent HSA expert, HSA for America has earned a reputation for providing superior educational resources for individuals, families and small businesses. With its comprehensive website, the public can evaluate high-deductible health insurance plans that allow an HSA to be establish, and comply with the health care reform mandate here: http://www.hsaforamerica.com/hsa-plans.htm
Guidelines for selecting an HSA administrator based on fees and investment options are readily available on the HSA for America website. Consumers may also access HSA for America’s instant quote engine and online applications, or request individualized assistance. Confidential consultations regarding HSA plans and Health Reimbursement Arrangements may be arranged by calling 1-866-749-2039 from 9 AM through 11 PM Eastern.