Health Savings Accounts or HSAs are one of the best things Congress ever passed as they can provide tremendous financial benefits to individuals and families, as well as offer some advantages to employers.
Who is eligible?
Health Savings Accounts are available to anyone enrolled in a qualified high deductible health plan. This can be a qualifying individual plan or a qualifying group health insurance plan.
Attractive Tax Advantages
Health Savings Accounts are triple tax advantaged providing real value to insureds and families today and tomorrow.
HSA contributions are tax deductible. For 2024 the maximum annual contributions are $4,150 for individuals and $8,300 for families. An additional $1,000 annual “catch-up” contribution is also available for individuals age 55 and older. For 2025 these limits increase to $4,300 for individuals and $8,550 for families. You can contribute to your HSA for 2024 up until April 15 2025.
HSA contributions grow tax free. Monies in a Health Savings Account can be invested in a variety of vehicles such as mutual funds, target date funds, and more. All gains /returns on these investments are also tax free.
HSA distributions are tax free. When HSA monies are withdrawn for eligible medical expenses these withdrawals are also tax free.
Due to these very attractive tax breaks, financial professionals will often advise clients to stuff their HSA first each year to make sure they maximize the available value. HSA balances are also yours for life, meaning there is no use it or lose it requirement. The funds can be used at any point in your lifetime.
Employers can also benefit by contributing to an employee’s HSA as an additional way to compensate employees, but without having to pay payroll taxes on these funds.
Mark Bradley
BMA Financial - Insurance Services
501.499.4205
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