HSA - Tax-Advantaged Savings

An HSA (Health Savings Account) is a tax-advantaged savings account that is owned by an employee or self-employed person. The contributions and earnings can escape taxes when distributed if they go toward qualified medical expenses. So, if you have an HSA account and know in advance how much you will have in medical expenses, you can save that taxes.


The accounts are easy to set up and fund. The maximum contribution allowed for a family in 2016 is $ 6,750. If you are over 55, you can put an additional $1,000 into your HSA account.
Check if your HSA comes with investment options. HSAs accounts with investment options are a better choice for you.


Max, it Out to the point you can draw this money toward medical expenses. As you know, medical expenses are subject to an income limitation. The HSA, however, allows you to move a deduction for medical expenses from Schedule A to a deduction on the front of a Form 1040, so an HSA deduction will reduce your taxable income while medical expenses paid may not.
 

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