HSAs can be a useful way to save for current and future health care expenses—as long as you follow the IRS's rules. You can only contribute a certain amount to your HSA each year, but all contributions roll over from year to year. In 2024, you can contribute up to $4,150 if you...
A medical expense can be considered qualified if incurred by your spouse, any dependents you claim on your tax return, or anyone you could’ve claimed as a dependent but did not because of certain IRS rules.4 You can’t use your HSA funds for insurance premiums unless the premiums paid fo...
If you discover you have contributed too much to your HSA, you must take action to avoid paying penalties to the IRS. Remove any excess funds you contributed, plus any interest earned on that amount. You must pay tax on this withdrawal before April 15 of the following year. If you fail ...
Under the health savings account rules, an individual cannot open an HSA if they can be claimed as a dependent. Generally, an employee cannot contribute to both an FSA and HRA while contributing to their HSA. However, there might be some exceptions. Consult the IRS’s Publication 969 for mo...
Impact of Medicare Enrollment on the Testing Period Rule According to IRS rules, you are only eligible to contribute to an HSA if you are enrolled in a high-deductible health plan (HDHP) and are not enrolled in Medicare. If you are within 12 months of enrolling in Medicare, your Medicare...
“Medicare’s Tricky Rules on HSAs After Age 65,”JofA,May 16, 2023 Podcast episode “How Medicare Enrollment Impacts HSA Contributions,”PFP Section podcast, March 10, 2022 Video “Health Savings Accounts: Beyond the Basics,” May 21, 2023 (exclusive to PFP Section members)...
How health savings accounts (HSA) can reduce taxes and pay for deductibles or out-of-pocket costs of a high deductible health plan (HDHP), who is eligible for HSA's, and a discussion of the rules for contributions and distributions from HSA accounts, inc
In order to enjoy the full tax benefits of an HSA and stay compliant with IRS rules, you need to complete and file Form 8889 each year you contribute to or distribute money from your HSA. This form allows you to claim a tax deduction for any HSA contributions you made outside of payrol...
These rules are stricter than for other investment accounts, such as the 401(k) and403(b), which allow for a taxable but penalty-free early withdrawal to pay for sudden financial hardship. HSA Alternatives Two alternatives to the HSA are flexible spending accounts (FSAs) andhealth rei...
To qualify for HSA funds’ use, the vehicle’s modifications and adaptive equipment must be a qualified medical expense under IRS rules. This means the expense should directly contribute to the improvement, maintenance, or mitigation of the individual’s medical condition, mobility, or accessibility...