hsa - Linkenheimer LLP CPAs & Advisors

Do You Know the ABCs of HSAs, FSAs and HRAs?

There continues to be much uncertainty about the Affordable Care Act and how such uncertainty will impact health care costs. So it’s critical to leverage all tax-advantaged ways to fund these expenses, including HSAs, FSAs and HRAs. Here’s how to make sense of this alphabet soup of health care accounts.

HSAs

If you’re covered by a qualified high-deductible health plan (HDHP), you can contribute pretax income to an employer-sponsored Health Savings Account — or make deductible contributions to an HSA you set up yourself — up to $3,450 for self-only coverage and $6,900 for family coverage for 2018. Plus, if you’re age 55 or older, you may contribute an additional $1,000.

You own the account, which can bear interest or be invested, growing tax-deferred similar to an IRA. Withdrawals for qualified medical expenses are tax-free, and you can carry over a balance from year to year.

FSAs

Regardless of […]

By Linkenheimer LLP|2018-06-26T17:41:04+00:00June 26th, 2018|affordable care act, Health care, hsa|0 Comments

New Health Saving Account Limits for 2018

The Internal Revenue Service released the 2018 inflation-adjusted limitations for health savings accounts.

In Revenue Procedure 2017-37, the IRS said the annual contribution limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,450. For calendar year 2018, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $6,900. HSAs typically require high deductibles, but they allow people to set aside money from their paychecks on a pre-tax basis for medical expenses.

For calendar year 2018, according to the IRS, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage.

For 2017, the lower limit on the annual deductible under a high-deductible plan was $1,300 for self-only coverage and $2,600 for family coverage, the same as for 2016. The upper limit for out-of-pocket expenses was $6,550 for self-only coverage and $13,100 for family […]

By Linkenheimer LLP|2020-09-03T20:04:55+00:00May 24th, 2017|hsa|0 Comments

Health Savings Accounts (HSAs)

HSAs allow eligible individuals to make deductible contributions that can be withdrawn tax-free later to reimburse the individual for eligible medical expenses. For 2016, the limitation on HSA deductions is $3,350 for an individual with self-only coverage under a High Deductible Health Plan (HDHP) or $6,750 for an individual with family coverage. An HDHP is defined under IRC Sec. 223(c) as a health plan with an annual deductible not less than $1,300 for self-only coverage or $2,600 for family coverage, with annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) not exceeding $6,550 for self-only coverage or $13,100 for family coverage. If you have any questions, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2020-09-03T20:05:28+00:00May 15th, 2015|hsa|0 Comments

Year-end tax planning with checklists and tips

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks doubtful. These include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line deduction for qualified higher education expenses; and tax-free distributions by those age 70-1/2 or older from IRAs for charitable purposes. For businesses, tax breaks that are available through the end of this year but won’t be around next year unless Congress acts include: 50% bonus first-year depreciation for most new machinery, equipment and software; an extraordinarily high $500,000 expensing limitation; the research tax credit; and the 15-year write-off for qualified leasehold improvements, qualified restaurant buildings and improvements and qualified retail improvements.

High-income-earners have other factors to keep in mind when mapping out year-end plans. For the first time, they have to take into account the 3.8% tax surtax on unearned income and the additional 0.9% Medicare (hospital insurance, or HI) tax that applies to individuals receiving wages with respect to employment in excess of $200,000 ($250,000 for […]

By Linkenheimer LLP|2020-09-03T20:05:47+00:00November 26th, 2013|3.8, 401k, agi, amt, best place to work, CPA, hsa, ira, medicare, mike musson, roth ira, Santa Rosa, tax, tax planning, year-end|0 Comments