- Tax Benefits: Contributions aretax-deductible(up to annual limits) andtax-freewithdrawals are
allowed to the extent that they are used to pay qualified medical expenses. - Investment Potential: Many HSAs offer investment options to grow your savings tax-free.
- Flexibility: Unused funds roll over year-to-year and can be used for future medical expenses, even in retirement.
- Reimbursements: There is no time limit for a taxpayer requesting reimbursement from an HSA for a medical expense he or she paid with funds outside the HSA.
- Portability: HSAs belong to you, not your employer. You can keep it even if you change jobs.
Requirements:
- Covered by an HSA-eligible health plan, otherwise known as an HDHP
- Not covered by any other health plan that would disqualify them from an HSA
- Not enrolled in Medicare
- Not claimed as a dependent on someone else’s tax return
Annual Contributions Limits:
- $4,100 for an individual self-only plan or $8,300 for a family plan in 2024.
- An additional $1,000 is allowed for taxpayers who reach age 55 by the end of the tax year.
- Remember HSA contributions within these limits are tax-deductible.
- Important Notes:
o Employer contributions made to an HSA are excludable from the employee's gross
income.
o Employer contributions to your HSA reduce these annual limits on your deductible
contributions.
Starting at age 65 you can withdrawal funds from your HSA with no 20% penalty for any reason;
however, withdrawals are taxed as income, essentially like an IRA. You can still withdrawal for health
costs tax-free at any age. HSAs have become extremely popular for a reason.
A financial advisor can dive deeper into the benefits of HSAs and analyze if they can be a good addition
to your financial plan.
About Burrows Capital Advisors
Burrows Capital Advisors (“BCA”) is a leading financial advice firm. Burrows Capital Advisors offers a comprehensive range of investment management services, thoughtfully designed to manage their clients' assets, and the risks embedded in their investment portfolios. Their long-standing commitment to risk management principles underscores their dedication to helping clients achieve their financial objectives with confidence, making them a trusted partner in the investment management industry. Comprehensive services include wealth management solutions, retirement plan solutions, advisory services, practice management support, innovative technology, marketing guidance, regulatory support, and market research.
Burrows Capital Advisors, LLC is headquartered in League City, TX in the Greater Houston metro. BCA is located at 2450 South Shore Blvd., Suite 220 League City, TX 77573.
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