Benefits of an HSA & How to Qualify

Here are some benefits of having an Health Savings Account:

  • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you don’t itemize your deductions on Form 1040.
  • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income.
  • The contributions remain in your account until you use them.
  • The interest or other earnings on the assets in the account are tax free.
  • Distributions may be tax free if you pay qualified medical expenses.
  • An HSA is “portable.” It stays with you if you change employers or leave the work force.

Qualifying for an HSA

  • To be an eligible individual and qualify for an HSA, you must meet the following requirements:
  • You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
  • You generally have no other health coverage except what is permitted under regulations. (Exceptions include dental, vision, long-term care, accident and specific disease insurance.)
  • You are not enrolled in Medicare.
  • You cannot be claimed as a dependent on someone else’s tax return.

For more information about HSAs, contact Adam E. Panek, CPA at 315.701.6328 or apanek@gsacpas.com.

Source: The IRS

Copyright 2016

2017-11-22T21:53:32+00:00