Retirement Planning

Tax-Free Distributions from HSAs

Tax-Free Distributions from HSAs

Retirement Planning, Tax Planning

A Health Savings Account (HSA) is a tax-advantaged medical savings account available to individuals who are enrolled in high-deductible health plans. To learn more about HSAs and how they are tax-advantageous, read our blog on Health Savings Accounts. After understanding the basics of how HSAs work, it is valuable to know about the following six tax-free HSA distributions:

1. “Qualified medical expenses” are more than just doctor bills. In general, they include all things that generally qualify for the medical expense deduction under the Tax Code, such as medical supplies, prescription co-payments, dental care, vision care, and chiropractic expenses.

2. After age 65, you can use your HSA to cover Medicare premiums. However, you cannot use it to cover Medigap premiums.

3. You may withdraw from your HSA to cover qualified medical expenses, even if you no longer have a high-deductible health insurance plan. For example, you cannot contribute to an HSA once you are enrolled in Medicare, but you can keep your existing HSA and take tax-free distributions to cover qualified medical expenses.

4. You are not required to withdraw from an HSA each time you incur a medical expense. You can pay for the cost out of pocket and let your HSA grow. Additionally, you can take a distribution from your HSA to cover a qualified medical expense incurred in a previous year, as long as the expenses were incurred after you established your HSA.

5. Your HSA may be used to pay for your spouse or child’s medical expenses, even if they are not covered under your high-deductible insurance plan.

6. If your spouse is the beneficiary of your HSA, after your death, he or she can maintain the HSA in his or her name and continue to access the funds. Distributions for qualified medical expenses are tax-free.

 

Important Disclosure Information: The information contained within this blog is for informational purposes only and is not intended to provide specific advice or recommendations. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Schultz Financial Group Incorporated), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Schultz Financial Group Incorporated. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Schultz Financial Group Incorporated is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Schultz Financial Group Incorporated’s current written disclosure statement discussing our advisory services and fees is available for review upon request. Please Note: Schultz Financial Group Incorporated does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Schultz Financial Group Incorporated’s web site or incorporated herein, and takes no responsibility therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Where you want to go in life is up to you. How to help you get there is up to us.

Contact us today to start your journey…

Contact

Schultz Financial Group Inc.
10765 Double R Blvd. Suite 200
Reno, NV 89521
Phone: (775) 850-5620
Fax: (775) 850-5639
Email: [email protected]

Where you want to go in life is up to you. How to help you get there is up to us.

Contact us today to start your journey…

Contact

Schultz Financial Group Inc.
10765 Double R Blvd. Suite 200
Reno, NV 89521
Phone: (775) 850-5620
Fax: (775) 850-5639
Email: [email protected]

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Copyright © 2018 Schultz Financial Group Inc.

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