HSA for America

Fund Your 2009 HSA

January 15, 2010
Vol. 6, Issue 1

Price transparency is the novel idea that prices are shared with the consumer, before the purchase.  When this happens, we can more easily shop, compare prices, and save money.   As millions of people do this, healthcare providers must respond with better value in order to earn our business, and everyone benefits.  In part due to the rising popularity of high- deductible HSA plans, price transparency is exploding in many areas of healthcare.  Here’s where you may be able to save some money.

Don't Miss Out on this Tax Benefit

Millions of people carry HSA-qualified plans, often because these plans are so much less expensive than conventional copay plans.  People who are young and healthy, or people who are older but health conscious, don't go to the doctor that often and would rather save the money.  But many people miss out on the greatest tax-savings opportunity available.

Anyone who has an HSA-qualified health insurance plan is allowed to deposit pre-tax dollars into a special bank account, called the HSA or health savings account.  Because this money is not taxed, it is deducted directly from your adjusted gross income when you are preparing your taxes.

It Will Save You Some Money

Running a business and raising a family and tending to personal finances, and doing everything else we all do – we’ve all got to be good time managers these days.  As I’ve mentioned in a previous letter, during the rush I somehow neglected to make a deposit to my HSA for 2008.  I did not make the same mistake in 2009.

Wiley and Wiley IV

Anyone who had an HSA-qualified plan in place no later than December 1 2009 can deposit up to $5950 (for families) or $3000 (for individuals) into their HSA.   That deposit right there may save you a fair bit on your federal income tax return.  Almost every state will also give you the deduction.

So missing that deposit cost me hundreds of dollars in extra taxes, but it doesn’t stop there.  The deposit in an HSA grows tax-deferred, just like with an IRA.  Not paying taxes on the growth of your investment can greatly accelerate your returns.  You can invest your HSA in stocks, bonds, mutual funds, or virtually anything you like.

You Have Until April 15th

You have until April 15th to make a 2009 deposit into your HSA.  You can also get a head start, and make your 2010 deposit.  The contribution limits for this year are $3050 for individuals, and $6150 for families.  The sooner you make your deposit, the sooner you will be taking advantage of tax-free growth.

If you are trying to decide between placing money in an IRA or an HSA, that one is a no-brainer.  This is because that any withdrawals from your HSA are tax-free, as long as you have medical expenses to back up the withdrawal.

Save Your Receipts

Remember to save your receipts any time you pick up some cold medicine or a prescription.  Ditto when you go to the eye doctor or dentist, or incur any other medical expenses.  You can immediately reimburse yourself from your HSA, or you can let the money continue to grow tax-free, and take it out at a later date.

If you need to open a health savings account, you can find a list of banks we recommend by going to the HSA Admins link on our home page.


To your health and wealth!

Wiley Long
President - HSA for America

P.S. - Next month we'll talk about natural ways you can reduce your risk of cold and flu this winter.


HSA for America
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Fort Collins, CO 80524
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