How to Protect Your Money from Getting Eaten by Health-Care Costs

Read Time:3 Minute, 32 Second

If you have more than $5,000 a year in out-of-pocket medical expenses, chances are, you could benefit from an HRA. Legislation that went into effect for small-business owners in 2017 allows you to write off up to $10,000 of medical expenses before insurance premiums and off the top (not like itemized medical expenses).

You can spend the money tax-free on qualified medical expenses, including deductibles, den-tal, eye care, chiropractic care, acupuncture and even hotel and lodging while at the hospital. You can start taking out money immediately– there’s no waiting period.

Your HSA contributions are deductible from your gross pay, or business income. The tax deduction has been hovering between $3,000 to $4,000 for singles and $6,000 to $7,000 for families, adjusted for inflation each year.

Help Pay for Your Retirement. After you turn 59 1/2, you can withdraw the money for non– health-care expenses, then pay federal income taxes on it. The HSA then acts like a traditional IRA since the HSA holder pays ordinary income taxes on nonmedical-related withdrawals, with the added perk that you don’t have the mandatory disbursements usually required by traditional IRAs.

You take control of many health-care decisions because you can pay cash out of your has and there’s no insurance company between you and your health-care provider where you can control your care and negotiate for lower prices. Now, let’s hit the bolts and nuts:.

Health Savings Account (HSA).
The Health Savings Account is one of the most powerful pieces of a well-designed health-care strategy. It includes saving money, saving taxes, building a tax-free bucket for health care and, most importantly, taking control of your own health-care strategy. You save money because in order to have an HSA, you have to have a high-deductible health-care plan (which usually means you’ll have a lower premium with a higher deductible and be able to save money).

Self-Direct Your HSA Investments. If you want to self-direct, just place your HSA funds with a custodian that allows for self-directing rather than with your local bank.

The cost of health-care related expenses, from insurance to prescription drugs to out-of-pocket copays, is out of control and can eat up our wealth as fast as we make it. It includes saving money, saving taxes, building a tax-free bucket for health care and, most importantly, taking control of your own health-care strategy. You save money because in order to have an HSA, you have to have a high-deductible health-care plan (which usually means you’ll have a lower premium with a higher deductible and be able to save money).

Chances are, you aren’t getting any sort of a tax deduction for these extra medical expenses, and just imagine if you could deduct 100 percent of these medical costs. Even further, imagine the power of this strategy if you have significant medical costs in your family and you could deduct up to $10,000 of medical costs over and above your health insurance or even HSA– it could be life-changing!!

The HSA account builds and grows for your future health-care needs. After you turn 59 1/2, you can withdraw the money for non– health-care expenses, then pay federal income taxes on it.

You save taxes because you get a tax deduction when contributing to your HSA. At the same time, you build a tax-free bucket of money in an HSA, just like an IRA. The money can be invested, the growth is tax-free and withdrawals for health care are also tax-free.

The cost of health-care related expenses, from insurance to prescription drugs to out-of-pocket copays, is out of control and can eat up our wealth as fast as we make it. There are some things we can do to prepare and insure ourselves against catastrophic health-care costs during our lives. Following are three bedrock strategies to writing off all your health care.

The funds grow tax-free and aren’t a “use it or lose it” plan. The HSA account builds and grows for your future health-care needs.

Happy
Happy
0 %
Sad
Sad
0 %
Excited
Excited
0 %
Sleppy
Sleppy
0 %
Angry
Angry
0 %
Surprise
Surprise
0 %

Average Rating

5 Star
0%
4 Star
0%
3 Star
0%
2 Star
0%
1 Star
0%

Leave a Reply

Your email address will not be published. Required fields are marked *