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Post by sunnyd on Mar 19, 2019 21:08:04 GMT
Dh's employer puts $3,000 into his HSA every year to cover our high deductible. Luckily we've never used much of the employer's contribution so have a decent balance in the HSA account. And we've never contributed personal funds into the HSA since we never have any medical expenses (so far). But we could use a decrease in tax liability so I'm thinking about contributing just to reduce our taxable income. Are there any peas with tax or HSA knowledge that could advise on that idea? From what I can tell HSA contributions are kind of like a 401k as far as tax consequences go (not taxable.)
Also, if you have a HSA are the funds invested or earn interest? TIA!
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Post by busy on Mar 19, 2019 21:12:46 GMT
We’re no longer eligible to contribute to an HSA but always maxed it out at my prior employer. We rarely needed to use any funds, invested the excess over our annual deductible, and it’s grown nicely. We did pay for DS’s braces out of it, but otherwise intend to let it grow and essentially be an extra source of retirement income. Unless our national healthcare system has completely changed by the time we retire, we’ll definitely need that extra money toward healthcare.
And yes, there’s definitely a tax benefit to HSAs - reduce the taxable income now and then qualified distributions are also tax free.
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Post by redshoes on Mar 19, 2019 21:24:36 GMT
Oh yes, we max it out every year to lower taxable income. It’s not a lot but helps some. We just started doing this with 401k last year as well. Out CFO does the same and chooses to cash flow medical expenses out of pocket so that her HSA fund will be larger later on when the need may be greater.
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Post by roberta on Mar 19, 2019 21:27:18 GMT
No I max it out every year - with a 5,000 deductible and co-pays.
eta: I am not sure I understood your ? Correctly. We do it to save money because we have high med expenses.
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Post by gale w on Mar 19, 2019 22:04:07 GMT
We are no longer eligible for an HSA (not sure why since the requirements listed on the IRS site are in line with our insurance policy) but when we did we contributed to it solely for the tax deduction. We're self employed so all contributions were out of our own pocket.
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Post by utmr on Mar 19, 2019 23:17:38 GMT
We max it out, both for the tax benefits and to save toward retirement. We have not had it invested previously because we have had lots of medical bills and needed it to be liquid. Once we build the balance up to the deductible, I want to invest it.
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Post by cmpeter on Mar 20, 2019 0:10:52 GMT
My new job doesn’t offer one. But, yes I would contribute the Max. Not just for the tax benefits but to save for medical expenses once retired.
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Post by bearmom on Mar 20, 2019 0:13:18 GMT
Yes. For tax reasons, retirement, or other unexpected health care costs.
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scrappinmama
Pearl Clutcher
Posts: 4,814
Jun 26, 2014 12:54:09 GMT
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Post by scrappinmama on Mar 20, 2019 1:26:12 GMT
We do it first to cover medical expenses, with taxes being just an added benefit that it.
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Post by fwscrapper on Mar 20, 2019 10:35:30 GMT
Yes, but we use it all within the first 3-4 months bc of my son’s therapy and med bills. We never have anything left and our employers don’t put in anything for us.
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Post by MZF on Mar 20, 2019 11:57:11 GMT
Yes, we do it more for the tax benefit. We've only had an HSA for a couple to yrs, don't have many medical expenses (thank goodness), but save receipts and have the Long Term insurance premiums that we can use for withdrawals later if we want to.
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Post by bdawnb on Mar 20, 2019 14:08:49 GMT
We max it out every year. Since our insurance has no co-pays until we hit our individual deductible of $3500 of combined $7000 we need that cushion in case of an emergency. The tax benefit is just a bonus.
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Post by compeateropeator on Mar 20, 2019 14:47:53 GMT
Are HSAs through employers, or is it a federal program? Probably a silly question and I will definitely read more on it.
I thought I had a HSA (at least some years) but it is very different than what is being described. The little bit of research that I just did tells me it is really a HRA (Health reimbursement account). We pick the amount that we want for the year when we sign up for our annual benefits. That amount is deducted from our paycheck (pre-tax) in equal increments throughout the year, but you have access to the entire amount on the first day of the year. However, what you don’t use you forfeit. Although it has recently changed where you can carry over a portion of your account for an extra 3 months.
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Post by sunnyd on Mar 21, 2019 23:12:24 GMT
Thanks so much for confirming that!! Dang, I'm sad I have been missing out on the tax benefit all these years. At least I can still make the contribution for 2018. Now I need to figure out the investment options. compeateropeator It's through dh's employer. I don't know the difference between HSA and HRA but our HSA isn't forfeited if not used.
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AnotherPea
Pearl Clutcher
Posts: 2,968
Jan 4, 2015 1:47:52 GMT
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Post by AnotherPea on Mar 21, 2019 23:27:47 GMT
Yep every year. Used to do daycare too. Every bit helps.
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Post by mom on Mar 22, 2019 0:12:57 GMT
Are HSAs through employers, or is it a federal program? Probably a silly question and I will definitely read more on it. I thought I had a HSA (at least some years) but it is very different than what is being described. The little bit of research that I just did tells me it is really a HRA (Health reimbursement account). We pick the amount that we want for the year when we sign up for our annual benefits. That amount is deducted from our paycheck (pre-tax) in equal increments throughout the year, but you have access to the entire amount on the first day of the year. However, what you don’t use you forfeit. Although it has recently changed where you can carry over a portion of your account for an extra 3 months. This is what I thought as well. There is no saving it for retirement? Am I missing something that we should be doing? We fully fund ours for our medical bills. My hormones alone are $1600 a year. So we try our best to estimate everything else medical we may need and get it close, without a bunch leftover.
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Post by busy on Mar 22, 2019 0:23:31 GMT
Are HSAs through employers, or is it a federal program? Probably a silly question and I will definitely read more on it. I thought I had a HSA (at least some years) but it is very different than what is being described. The little bit of research that I just did tells me it is really a HRA (Health reimbursement account). We pick the amount that we want for the year when we sign up for our annual benefits. That amount is deducted from our paycheck (pre-tax) in equal increments throughout the year, but you have access to the entire amount on the first day of the year. However, what you don’t use you forfeit. Although it has recently changed where you can carry over a portion of your account for an extra 3 months. This is what I thought as well. There is no saving it for retirement? Am I missing something that we should be doing? We fully fund ours for our medical bills. My hormones alone are $1600 a year. So we try our best to estimate everything else medical we may need and get it close, without a bunch leftover. They are two different things - HSAs (health savings accounts) and FSAs (flexible spending accounts). The former is not use-it-or-lose-it, the latter is. www.nerdwallet.com/blog/health/employer-offers-hsa-fsa-whats-difference/ ETA: You have to have a qualified high deductible health plan to be eligible to make deposits to an HSA. Also, you retain the funds in your HSA if you leave your employer (HSAs don't have to be through your employer, but often are). You can still spend the funds tax-free in an existing HSA even if you are no longer eligible to make deposits.
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Post by mom on Mar 22, 2019 0:25:47 GMT
This is what I thought as well. There is no saving it for retirement? Am I missing something that we should be doing? We fully fund ours for our medical bills. My hormones alone are $1600 a year. So we try our best to estimate everything else medical we may need and get it close, without a bunch leftover. They are two different things - HSAs (health savings accounts) and FSAs (flexible spending accounts). The former is not use-it-or-lose-it, the latter is. www.nerdwallet.com/blog/health/employer-offers-hsa-fsa-whats-difference/ Ohhh! Thank you! Definitely need to read up on this.
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Post by worrywart on Mar 22, 2019 3:19:26 GMT
Yes, mine is not through my employer but one that I opened through HSA bank. Some employers offer the service and I already have the account so do it myself. We do the maximum contribution.
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peaname
Pearl Clutcher
Posts: 3,389
Aug 16, 2014 23:15:53 GMT
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Post by peaname on Mar 23, 2019 15:52:17 GMT
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