Our clients all have access to us for their personal finance needs and one of those happens to be Health Savings Accounts. Though we do not offer HSA's at jazzWealth, we do advise on how to best manage them. Here are 2 things I'll bet you didn't know about health savings accounts.
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I’m a little confused….did you say toward the end of the video that I can pay for the taxes on my SEP IRA with HSA monies? Â I thought it had to be exclusively medical expenses?
Paul Connolly no not at all. I was referring to the reimbursement rules that say there is no time limit on reimbursement. Theoretically yes you could reimburse yourself for prior expenses but use that money to cover taxes…I’m sure I could have worded it better 😉 If you want a better explanation feel free to set up a call and I’ll clarify. Thanks for watching!
You can pay for taxes on IRA with the money you reimbursed yourself with from your HSA
The reimbursement no time-limit loophole is a really nice one. You could use that money for any purpose you want, not just paying taxes. If you have the medical receipts to document you paid them, and did it out of pocket without dipping into the HSA there is no restriction on what you spend the money on when you decide to pull that money out.
You got it 🙂 Thanks for watching!
Are HSA distributions be used for some specific illness? Can’t they be used like any time when I went for a test or paid fee to the doctor?
yes they can and there is no time limit on the reimbursement.
The reimbursement for prior years’ medical expenses – does that only work if you had an HSA at the time (say, when you were 22)? Or, could you open an HSA at 35, and then reimburse yourself for expenses paid out of pocket when you were 22?
Great info, by the way!
HSA has to have been open for the year you want to reimburse. I like your thinking though 😉
I figured that would be the case, but I thought I’d ask anyway, haha. Thanks!
@Jazz Wealth Managers I would also add you had to have had the H.S.A. qualified health plan for the months that you incurred the medical expenses, correct?
Question , can a llc or s or c Corp have HSA for them and their employees retc?
Or what about people that’s not working can they get it as well, the HSA?
oh wow, did not know this that it can be applied retroactively…nice to know, Thanks!
Can a person have two HSAs, say, an employee-sponsored plan as well as an account with an investment institution? And you said money transferred from a traditional IRA to the HSA is transferred tax-free? Sounds too good to be true!
You can have as many HSAs as you’d like but can still only contribute the total maximum each year per the IRS.
So it’s a must on the high insurance deductible? Does it have to be from an employer, or can I get insurance from another company/cover cal or something?
Keep your medical bill receipts that you had in the past, 30 years ago, so you can prove you had them.
Referred to you by Josh, Heritage Wealth Planning. Sub’d to your channel, great video, Thank you for All you do!
This was a good video I didn’t know either one of these tips.
Yes, leaving the money in the HSA now, paying out of pocket for those expenses and cashing out later if a good way to save, but be careful not to double dip by also itemizing those expenses and getting a deduction for them now.
Good point!!
The IRS will catch that and will initiate an audit and the scope will go back to the earliest year, not just the typical 3-7.
Can you clarify? What do you mean by double dip?
@Missi Reason What does that mean? What does the IRS catch? What is a double dip? Can you explain what this means?
Random question – maybe not even a good question – but if I choose during open season to move to a HDHP and start this plan on 1/5/2020, can I make contributions to 2019 since we’re still before April 15?
Very informative video! My question is if I had a HDHP in 2019 thru my employer, but switched to a different type of plan for 2020, can I still make HSA contributions on my own now and write them off for the same benefit come tax time?
No
Everything up to min 3:00 made sense. In fact that’s what I do (I pay out of pocket while maxing out my HSA and letting it grow so that 10, 15 or 20 years down the line I can get reimbursed after having let my funds grow as much as possible). The “treat the HSA as a Tax Payment Center” on 3:05 really lost me… how or why would I use the HSA funds to pay taxes?
Same here Patrick. Dustin lost me there.
He’s saying you will be receiving tax free money from your HSA. Then with that tax free money you can pay the taxes owed on money you may receive from a traditional IRA.
Thank you for this!
i’m trying to enroll in HSA eligible insurance. How does “premium pass through” work? does the insurance company contributes premium automatically into HSA account??
Wow— I did not know that! Thank you!