Have Questions About HSA Contributions? We’ve Got Answers
The even bigger news? An HSA fund gives you a triple tax break. This means that your contributions are sheltered from income taxes, the money grows tax-free, and you can use it tax-free for eligible healthcare expenses whenever the time is right.
So, how do you grow this savings account quickly, maximizing all of its benefits? There are lots of ways. You’ll soon see that you don’t have to build a stash of money all on your own.
Who Can Contribute to My HSA?Who is allowed to contribute to your HSA? Choose your answer:
- Mom or Dad
- Grandpa or Grandma
How will you benefit from these contributions? You’ll receive a tax deduction for the amount added to your account, while instantly getting a boost in your savings! You may get so excited about this perk that you’ll ask for HSA contributions instead of gifts on your birthday.
Are your parents looking for a way to invest in your health? Then share this little known tip with them.
“If you have a working child who is starting out with an HSA, you can help them by putting in the balance to maximize their annual contributions.” This from Cynthia Turoski, a CPA and managing member of The Bonadio Group, a financial consulting firm. “It’s considered a gift (which itself has a limit of $15,000 per child per year), but you can put it directly into an HSA, and the child gets the tax benefit.” (investors.com)
Your parents’ generosity will be a gift towards your good health.
If you get your HSA through your work, find out if you receive employer contributions. Some employers may provide a small amount and others may fund your entire HSA. Any amount is like receiving extra money for your healthcare – a great bonus!
How Can I Contribute to My Own HSA?Putting money into your own HSA is super easy. Start growing your account by contributing from:
- Your paycheck. Your employer may allow you to have your HSA contribution deducted automatically from your paycheck. If that’s the case, you will not be taxed on the money that’s transferred to your account. By making your contribution automatic, you’re more likely to stick to saving and you’ll enjoy watching the HSA funds steadily grow. What’s the reward? More free time to plan your next vacation.
- Your bank account. You can have the HSA account manager set up an automatic withdrawal from your checking account directly to your HSA. The contribution is tax-deductible. You can choose the amount of the contribution and the day of the month for the transfer.