Welcome to Tax Season.
While not certain on the “Official” Start to Tax Season …
These Brief Multiple Part Posts are unique in that they give us ideas on ways to help our taxes for last year (2017) but can be completed now … in 2018!
Let’s Begin, in no particular order of ideas … but hopefully several that will save you Tax Dollars!
Health Savings Account (HSA)
- HSA is a pre-tax deductible plan for those with high deductible health insurance coverage
- Contributions can be made in the current year for prior years taxes
- Distributions for Qualified medical expenses are NOT taxable
- Deferrals grow tax free and do not have to be used annually
- Most plans have investment options
- Can only contribute until age 65
HSA’s are available to anyone with a High-Deductible Health insurance plan.
The best way to find out if you have the ability to do an HSA is to check with your Health Carrier.
Here are the current limits from one of our favorite HSA Providers: HSA Bank
Frequently employers may contribute towards some of these amounts. If the employer does not contribute the maximum, you are free to add your own personal “Tax Deductible” contribution … yes that is correct, the HSA is Tax Deductible.
Not only is the HSA Tax Deductible, but it is one of the few items that rarely phases out due to a big income year.
But Wait … there is more…. Unlike many pre-tax health plans, the HSA does not have a use it or lose it feature, meaning you can save it for future use … a feature we like as medical expenses are likely to be with us in the future at a greater level.
Most plans also have an investment feature as well, making the tax deduction, and deferral all the more advantageous.
Age Limitation – Age 65 –
Under current law, you may only make HSA contributions while you are age 64 or less. The month you turn at 65 your HSA contribution will be pro-rated for that year.
Reach out to us with any questions on this …. More of these last year tax savings ideas to come!
Have a Great “Less Taxing” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth