Dear Clients & Friends,
This weekend is a short read. Health Savings Accounts have grown tremendously in popularity over the last few years. Although these accounts do not permit extremely large deposits, there are several benefits to these accounts that we should all know about. Since many of our clients use them, we thought that we’d take a moment to give you the 2023 updates.
A quick refresher: a Health Savings Account, or HSA, is a tax-advantaged account that's paired with a high-deductible health plan (HDHP). HSAs offer several tax benefits; many of these benefits are similar to those you would get by using an IRA.
You may be able to make pre-tax contributions to your HSA via a payroll deduction through your employer. This would reduce your current income tax.
If you make contributions on your own using after-tax dollars, the contribution can be deducted from your federal income tax (and possibly from your state income tax) whether you itemize or not.
Contributions to your HSA, as well as any interest or earnings, grow tax deferred.
Withdrawals are tax-free if the funds are used to pay for qualified medical expenses.
Here are the key tax numbers for 2022 and the updates for 2023.
Feel free to pass this information along to anyone who may benefit from it.
Have a lovely weekend.
-Matt & Crew