Tax season is here. Are you a tax procrastinator, early filer, or somewhere in between? No matter if you are just getting started or already well on your way to submitting your 2017 taxes, you need to know how to save the most money.
Healthcare and Taxes
It might not be obvious that healthcare and tax savings are related. It isn’t to most. When choosing your healthcare plan you were making an important decision regarding your tax deduction eligibility. If you enrolled in an eligible high deductible health plan (HDHP), you can open an HSA.
Steps to Use Healthcare to Shield Money From Taxes
- Enroll in an HSA-qualified health plan, like a High Deductible Health Plan (HDHP)
- Open an HSA
- Establish (aka Penny Fund) your HSA
- Save, Invest or Spend your HSA money as it works best for you
By default, an HSA is a tax shield. An HSA is a 100% legal and legitimate way to save tax dollars. Using your HSA, you are entitled to triple-tax savings:
- Pre-tax payroll contributions
- Tax-free asset growth
- Tax-free deductions (when used for qualified out-of-pocket medical expenses)
As long as you stay below the maximum yearly HSA contributions limits, you can save more of your pre-tax dollars. Don’t just use an HSA to pay for healthcare expenses, use an HSA to keep more of your money. HSAs shield your money from income and capital gain taxes.
If you need help getting organized, here is a list of all the HSA tax forms you need. As always, please contact a certified financial or tax professional to help save the most tax-free dollars. Nothing in this post is intended to be tax advice, so please don’t take it as such!
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.