Catch up chance comiing on health savings accounts

Catch up chance comiing on health savings accountsSabrina Jackson, a certified physician assistant, examines Florence Rebeiz at AeroClinic in the Hartsfield-Jackson Atlanta International Airport. Rebeiz, in this 2008 photo(Photo: Robin Michener Nathan, for USA TODAY)
If you’re behind on saving for future medical expenses, some changes coming in health saving accounts may help you leapfrog ahead.Health savings accounts are designed to help people who have health insurance policies with high deductibles to set money aside to help pay medical expenses.If you qualify to have a HSA, you can contribute up to a certain amount of money each year and deduct it from your taxes. Yet that’s only the beginning of the tax benefits that HSAs offer.For 2017, there’s a $1,000 catch-up contribution allowed for those who are age 55 or older by the end of the year. So if you’ll turn 55 by Dec. 31, 2017, you’ll be able to contribute $4,400 for self-only coverage or $7,750 for family coverage toward an HSA. That catch-up contribution amount is unchanged from what it was in 2016.Other than that, there are relatively few changes for health savings accounts in 2017 compared to 2016. Because inflation adjustments have been minimal, most of the requirements for HSAs and their related high-deductible health plans, or HDHPs, remain unchanged. In particular, what qualifies as an HDHP remains the same, with the same minimum deductible and maximum out-of-pocket expense limits applying as they did in 2016. Only a modest change in contribution limits for self-only coverage takes effect in 2017.USA TODAY3 tips the self-employed can use to lower their taxesStill, there’s no doubting the tax benefits of HSAs. By contrast, most healthcare expenses are deductible only as itemized deductions, and they’re typically only deductible to the extent they exceed 10% of your adjusted gross income. As long as you later use the HSA money to pay or reimburse yourself for permissible medical expenses, then the distribution will be tax-free.Some workers will be familiar with flexible spending accounts for healthcare needs, which have some similarities to HSAs. However, HSA money isn’t tied to a particular year, and you never risk forfeiting your contribution if you don’t use it right away. Instead, you can carry forward unused HSA money as long as you want.Even better, HSAs are investment vehicles, and so you can take HSA money and put it to work in a similar way as you can with IRAs for retirement. In fact, HSAs combine two features that you can’t find in a single IRA: tax-deductible contributions and tax-free distributions. If you start using HSAs early in life and don’t actually need the money for medical expenses, you can actually build up a large nest egg for later in life when your healthcare needs are likely to rise.USA TODAYA massage? Health savings accounts may cover more than you thinkFinally, some employers actually offer HSAs in connection with their own group health insurance coverage. If you have the option to choose a high-deductible health plan at work, your employer might even be willing to make HSA contributions on your behalf, adding to whatever contributions you make yourself. Some workers can end up well ahead by choosing an HSA and HDHP combination rather than regular health insurance coverage without an HSA.Health savings accounts have unique attributes that make them attractive to many. By knowing the 2017 HSA changes, you’ll be up to date on how these valuable savings vehicles work.

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