Keeping more of your money is always a good thing. An HSA can help you maximize your tax savings to save more or invest more money for your financial health future. Understanding HSA tax implications, contribution limits and date requirements are the first steps to ensuring you can maximize your tax savings in 2017. From there, you can work with a certified tax or financial professional to best optimize your HSA funds along with other tax vehicles to save the most tax-free money in 2017.
As a quick refresher, in 2017, individuals can contribute $3,400 and families can contribute up to $6,750. Individuals who were 55 years of age or older as of 12/31/2017, can add an additional $1,000 on top of those contributions limits as catch up contributions. That increases to $2,000 if both family members on an HSA family plan are older than 55 years of age in 2017. To take advantage of the latter, two separate HSA accounts must be created.
When is the Last Day I can Add Money to my HSA?
HSA account holders have until Tax Day – Tuesday, April 17th, 2018 to add money to your account (and have it count toward the 2017 HSA contribution limit). Plan ahead though since it typically takes a couple of days for funds to go through the banking system and post to your account!
Understanding the HSA tax implications, limitations, and opportunities ensure you can take advantage of the tax opportunities provided by the HSA. To that point, the HSA was never truly intended to be a retirement savings vehicle, yet it’s tax structure created a dedicated savings account that has the same if not more tax advantages than the 401k or IRA. While the yearly contributions limits vary, it’s clear the HSA could be a secondary or even primary retirement saving vehicle for individuals or families, simply from a tax (and savings) standpoint.
No matter how you use your HSA, to spend, to save or to invest tax-free money, uncover the tax implications of all scenarios to ensure you maximize tax savings in 2017. The best news is even though 2017 has ended, you still have until April 17th, 2018 to take advantage of this opportunity. Don’t delay!
If you need more help with HSA decisions, check out our blog. We will make you a healthcare benefits expert in no time, without any extra work or effort on your end. Nothing in this post is intended to convey tax advice. Please be sure to seek tax advice from a tax professional.