E42: What is An HSA and Do I Need One?
Feb 19, 2020
What is a Health Savings Account and how does it work? What are these tax benefits everyone keeps talking about? You're in luck. Today we unpack HSAs and how they work.Listen to "E42: What is An HSA and Do I Need One?" on Spreaker.
What is An HSA and Do I Need One?
- Account designed for medical expenses
- Triple tax benefit
- File IRS Form 8889 if not through payroll deductions
- Grows tax-deferred
- Withdrawals are tax-free for medical expenses
- Need to use an HSA-approved high deductible health plan (HDHP)
- You can own an HSA any time but you can only contribute while you meet the requirements
- Annual limits: $3,550 single / $7,100 family maximum (2020) w/ $1,000 catch-up after age 55
- Can be used after age 65 for anything (not just medical expenses)
- Still tax-free for medical expenses
- Taxed at current tax rate for non-medical expenses
- Funds roll over and belong to you forever
- After your death, any funds remaining in your HSA are payable to the beneficiary you named on the account
- Funds can be invested, just like an IRA or 401(k)
Intro/outtro music credit: eccentric - I Can Show You [Argofox Release] by Argofox