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Health Savings Accounts – The Basics, Part 2
. In Part 1 of this two-part article, we introduced the concept of the Health Savings Account. In this portion, we’ll talk about some more of the specifics with regard to implementation of the plan, including contribution limits, setting up the plan, and taking distributions. Contribution Limits on the HSA The amount that you can contribute to a HSA annually depends upon the type of HDHP coverage that you have, as well as your age. For 2021, if you only have coverage for yourself, you can contribute up to $3,600. If you have the family coverage, you can contribute up to $7,200. You are considered to be eligible for the maximum contribution if you were eligible to make a contribution to your HSA on the first day of the last month of the calendar year, regardless of whether you were eligible in prior months (this is known as the […]
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Health Savings Accounts – The Basics, Part 1
A Health Savings Account (HSA) is a tax-exempt trust or custodial account that you set up with a bank or other US financial institution which allows you to pay or be reimbursed for qualified medical expenses. The HSA must be used in conjunction with a High Deductible Health Plan (HDHP). The HSA can be established using a qualified trustee or custodian that is separate from the HDHP provider. Contributions to an HSA must be made in cash or through a cafeteria plan. Contributions of stock or property are not allowed. Benefits of an HSA There are quite a few benefits to an HSA: Contributions to an HSA are deductible from income – even if you don’t itemize deductions; If your employer makes contributions to an HSA on your behalf (such as via a cafeteria plan) the contributions can be excluded from your gross income; Your account contributions can remain in […]
Sterling Raskie, MSFS, CFP®, ChFC®
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And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.