Times are tough financially, but you still want to make sure you can take care of your family’s health and well being. This is where a Health Savings Account (or an HSA) can really help.
However, there are IRS contribution limits for HSA funds. You need to make sure you are aware of these so that you can get the most benefit from an HSA.
We are going to take a look at some of the basics concerning a Health Savings Account, including whether you should take advantage of an HSA to help keep your family healthy and happy.
Benefits of an HSA
- Many Uses – There are quite a few ways you can legally use your Health Savings Account funds during the course of a year – and still deduct up to the HSA limits on your taxes at the end of the year.
- Extra Security – The extra layer of financial protection that an HSA can provide can really help to give you peace of mind. In these trying economic times, getting everything you can out of every single dollar you earn is important. This is where an HSA can really benefit you and your family.
- Tax Deductible – In many cases, you will be able to deduct your HSA from your gross earnings – up to a limit, of course. The amount you can deduct has gone up for 2012, meaning HSA contribution limits may not be as big of a problem for you.
- No Taxes – When the money in an HSA is used for qualified medical expenses, you will not have to pay taxes on the money that is spent. This can add up to quite a bit of savings every year. Paying for health care is expensive, but a Health Savings Account can really help.
- Rollover – If you do not use the funds in your HSA, the money will still be there for the next year. This will be in addition to the new funds that you put into your Health Savings Account. This is one of the reasons that so many people are using an HSA to benefit their family.
- Premiums – Certain qualified long-term premiums may be covered by funds in your HSA. This can take a lot of pressure off you and your family if there is someone who needs full time health care. Do not let the cost of taking care of a family member stand in your way of doing what needs to be done. A Health Savings Account may be the answer you have been seeking.
As you can see, there are quite a few ways in which an HSA can benefit you and your family. When it comes to health care, having a plan in place is very important. A Health Savings Account can supplement your existing health insurance, giving you even more protection and help should something happen. When a medical emergency or an injury happens, having the money for health care in a special savings account that is tax deductible makes a lot of sense.
HSA: Are You Eligible?
Here are some of the requirements you will need to meet to start an HSA.
- You must be currently covered by a high deductible health insurance plan
- You must NOT be covered under any other health insurance
- You must NOT be enrolled in Medicare
- You must NOT be another person’s dependent (for health purposes)
As you can see, the requirements for getting a Health Savings Account are not that difficult to meet. If you are already concerned about your family’s health, there is a good chance you are going to be eligible to get an HSA and really help your family. At the same time, you will be able to deduct the money from your HSA on your taxes.
2012 HSA Contribution Limits
The IRS just issued the 2012 contribution limits and they are higher than in 2011.
- For individual plans, the HSA contribution limit is $3,100.
- For family plans, the HSA contribution limit is $6,250.
HSA Contribution Limits Since 2004