Tax deductible expenses list
Only legit medical expenses that are not reimbursed by your insurance, and exceed 7.
5% of your income, are deductible.
IRAS personal tax deductible expenses
I think HSAs are one of the least appreciated retirement tools on the market.
A family can contribute up to $6650 a year, in pre-tax money (like a 401K or IRA).
There is a triple tax benefit for an HSA:,,Money goes in pretax or contributions are tax-deductible.
,Once in the account, money grows tax-free.
,Money can be withdrawn tax-free to cover qualified medical expensesn,nAnd, the real kicker is, once you hit age 65, you can withdraw the money for non-medical expenses with no penalty (still have to pay taxes on earnings, though).
,And, it is not subject to income limitations like IRAs, so for those who are tapping out on the limits of the other tax-advantaged retirement options (401k, IRA and Roth IRA), this is another good option for retirement investing.
,As Andy from Wealthfront pointed out - this is not free money.
Fees can be high if you dont pay attention.
You run the risk of spending a lot more cash on medical expenses, as an HSA requires you to have a high deductible insurance plan.
But, you also generally pay less in premiums on that plan.
In my personal case, the lower premiums were a wash with the additional medical bills, when factoring in the tax break.
My company also provided a matching contribution to the HSA.
So, its a good deal for me.
There are also significantly less investment options within HSAs.
Im hoping that will change over time.
,But, you need to evaluate this for your personal situation.
And its not a really easy calculation to do.