If you cash out the money before you’re 65 (and don’t use the money for qualified medical expenses), you’ll have to pay taxes on the amount, and you could be hit with a hefty 20% tax penalty. A health savings account (HSA) can be used to pay qualified medical expenses today, tomorrow and throughout your retirement years. Some people even view their HSA as an added retirement account. Or you can use it for non-medical expenses, just pay your regular income tax. You can continue to withdraw the money tax-free for medical expenses. If you’re over 65, there are no stipulations on how you can use the money. Qualified medical expenses are defined by IRS Code, Section 213 (d) and include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease for the purpose of affecting any structure or function of the body.If you’re under 65 and use the dollars for qualified medical expenses, you can withdraw the money tax-free.Since you own the account, the funds roll over year to year and the money stays with you - regardless if you leave your job or retire. For 2021, you may contribute up to 2,750 to cover eligible health care expenses incurred by you, your spouse and your children up to age 26. Pay for qualified medical expenses anytime with a swipe of your card. Spend now with your Fidelity HSA debit card. There are multiple ways you can spend from your HSA. There’s no “use-it-or-lose it” policy. When you, your spouse, or your dependents have qualified medical expenses that aren't covered by your health care plan, you can pay for them tax-free 1 with your HSA.You’ll need them to show the HSA money was only used to pay or reimburse qualified medical expenses. Keep receipts for medical expenses you paid for using HSA withdrawals. The money can sit in your account and potentially grow over time, all of it tax-free. money from your HSA at any time to help pay for qualified medical expenses that Medicare or Medicare Supplement Insurance (Medigap) doesn’t cover. You can invest your funds, and the interest or income is tax-free. Use our qualified medical expense search tool to find out what qualifies.When you make contributions, your taxable income is reduced. The money you contribute is tax-deductible.You can make deposits like you do with other personal bank accounts. Non-Allowable Expenses The following items are not allowed to be paid from your HSA. You own the account, not your employer. Eligible expenses may be paid from your HSA for yourself, your spouse, and other qualified tax dependents, even if they are not covered by your high deductible health plan insurance.After you enroll in a high deductible health plan and set up your HSA, you can begin contributing to the account.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |