Comments on: Tax Free Retirement Investing with Your Health Savings Account http://gotoretirement.com/2008/12/tax-free-retirement-investing-with-your-health-savings-account/ A Baby Boomer's Journey from Retirement Planning to Retirement Living Tue, 16 Mar 2010 17:58:44 +0000 http://wordpress.org/?v=2.9 hourly 1 By: danny http://gotoretirement.com/2008/12/tax-free-retirement-investing-with-your-health-savings-account/comment-page-1/#comment-1577 danny Mon, 14 Sep 2009 15:03:38 +0000 http://gotoretirement.com/?p=223#comment-1577 Like the tax stategy espicially with a prudent, yet growth oriented investment for your HSA. You didn't mention the interplay with the medical deduction allowed on Schedule A. Let's say you can contribute to your HSA $6950 in 2009. Your qualified medical expenses (including health care premiums not reimbursable from HSA) totals $15000 and your AGI is $50,000. The $15,000 less $6,950 or $8,050 could be shown on Schedule A and after the limitation of $3,750 ($50,000 x 7.5%) the deduction would be $4,300. Therefore you might have to make a decision each year whether to take any excess deduction currently or "bank" these expenses, (keep them on file)and get reimbusred years later from your HSA. This would make the growth value in your investment non taxable. Also interesting, could you consider that the $3,750 non deductible limitation be carried over and also be reimbursed from your HSA in later years? Afterall, it wasn't deducted. Food for thought?? Danny Like the tax stategy espicially with a prudent, yet growth oriented investment for your HSA.

You didn’t mention the interplay with the medical deduction allowed on Schedule A. Let’s say you can contribute to your HSA $6950 in 2009. Your qualified medical expenses (including health care premiums not reimbursable from HSA) totals $15000 and your AGI is $50,000. The $15,000 less $6,950 or $8,050 could be shown on Schedule A and after the limitation of $3,750 ($50,000 x 7.5%) the deduction would be $4,300. Therefore you might have to make a decision each year whether to take any excess deduction currently or “bank” these expenses, (keep them on file)and get reimbusred years later from your HSA. This would make the growth value in your investment non taxable.

Also interesting, could you consider that the $3,750 non deductible limitation be carried over and also be reimbursed from your HSA in later years? Afterall, it wasn’t deducted. Food for thought??

Danny

]]> By: Mr. GoTo http://gotoretirement.com/2008/12/tax-free-retirement-investing-with-your-health-savings-account/comment-page-1/#comment-1574 Mr. GoTo Sun, 13 Sep 2009 16:38:05 +0000 http://gotoretirement.com/?p=223#comment-1574 Danny - That's correct but there will be plenty of health care expenses that you can use the accumulated funds for when you are older (including Medicare premiums and stuff you paid for earlier), so it will be very easy to have tax-free withdrawals from the HSA. John: If the HSA is for a family health care policy (as mine is), then qualified medical expenses for any covered family member can be reimbursed from the HSA. As for your spouse, I believe she is entitled to have her own HSA if she is not part of your coverage. If she is part of family coverage with you, I think you are limited to your contributions. Check with your Plan Administrator to be sure. Danny – That’s correct but there will be plenty of health care expenses that you can use the accumulated funds for when you are older (including Medicare premiums and stuff you paid for earlier), so it will be very easy to have tax-free withdrawals from the HSA.

John: If the HSA is for a family health care policy (as mine is), then qualified medical expenses for any covered family member can be reimbursed from the HSA. As for your spouse, I believe she is entitled to have her own HSA if she is not part of your coverage. If she is part of family coverage with you, I think you are limited to your contributions. Check with your Plan Administrator to be sure.

]]> By: danny http://gotoretirement.com/2008/12/tax-free-retirement-investing-with-your-health-savings-account/comment-page-1/#comment-1573 danny Sun, 13 Sep 2009 16:12:07 +0000 http://gotoretirement.com/?p=223#comment-1573 I believe the amounts withdraw from an HSA account after age 65 is taxable if not used for medical purposes. Therefore it is not like a Roth IRA. Do you agree? I believe the amounts withdraw from an HSA account after age 65 is taxable if not used for medical purposes. Therefore it is not like a Roth IRA. Do you agree?

]]> By: John Kelly http://gotoretirement.com/2008/12/tax-free-retirement-investing-with-your-health-savings-account/comment-page-1/#comment-1537 John Kelly Fri, 04 Sep 2009 17:19:29 +0000 http://gotoretirement.com/?p=223#comment-1537 HSA funded from business. Can family, not just individual, qualified medical exp be paid from HSA account? With high deduct, ie 5000, Max 5950 can be contributed from business to HSA account + 1000 if over 55. Can an additional 1000 be contributed if spouse is employed at same location? Spouse has same insurance plan with high deductible. HSA funded from business. Can family, not just individual, qualified medical exp be paid from HSA account? With high deduct, ie 5000, Max 5950 can be contributed from business to HSA account + 1000 if over 55. Can an additional 1000 be contributed if spouse is employed at same location? Spouse has same insurance plan with high deductible.

]]>