An HSA is an Health Savings Account. If you have a High Deductible Health Plan you are eligible to contribute to an HSA. The benefit of contributing is that you receive a tax deduction for making a contribution and the money in that account can grow and can be withdrawn tax-free in the future to pay for Qualified Health Expenses. For some – it can be a challenge in putting away money into an HSA. Here’s a cool trick that you can take advantage of. You can make a tax-free rollover from your IRA to a Health Savings Account once in your lifetime. This has the potential to be a pretty big long term benefit. You don’t have to come up with the cash out of pocket. You need to have an IRA account that you can make the tax-free rollover from. You can rollover $3,350 for an individual and $6,750 for a family – plus an additional $1,000 if you’re age 55 or older. The total between contributions to an HSA or a rollover cannot exceed the maximum in a year. The rollover turns the money from what was once an account that you would pay taxes on in the future when you made withdrawals, the IRA, to An HSA account that can grow that now becomes tax-free if you use the funds for Qualified Health Expenses in the future. It may be tempting to withdraw the funds shortly after you rollover funds to deal with a health related expense. But try to think of money that you rolled over to an HSA as money to help pay for health related expenses in retirement. It was earmarked for retirement when the money was in an IRA. -Video Upload powered by https://www.TunesToTube.com
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