H.s.a.

[JG EA]

Will someone please reassure me on this. Can Health Savings Accounts be contributed to and a deduction taken in the same year that money was withdrawn for qualified expenses?
__________________
JG

[S T]

Just wondering if

we are talking about

Example:

Contributing to HSA (2009 Individual) $3,000 which would be a deduction on line 25 form 1040 - amount was contributed in 2009

Then in 2009 as well, t/p requested that 2,500 of qualified medical bills were paid or reimbursed from the HSA by 12/31/09?

It appears that the $3,000 contribution is deductible on line 25 reducing AGI and the $2,500 "qualified medical" distribution is reported on form 8889?

Seems to be a pretty good deal

Sandy

[Gretel]

I agree with Sandy. Deduction is solely triggered by contribution. You also could accumulate for 20 years, keep all your records of your medical expenses (not deducted on Sch.A), then in year 20 reimburse yourself and travel around the world.

[travis bickle]

Absolutely right

I agree with Sandy. Deduction is solely triggered by contribution. You also could accumulate for 20 years, keep all your records of your medical expenses (not deducted on Sch.A), then in year 20 reimburse yourself and travel around the world.

in effect, the residue is a mini-IRA - and there is no RMD when 70 1/2.

In addition, the taxpayer funds his IRA to the max AND funds his HSA account to the max -- the two numbers do not interact EXCEPT funding the HSA should reduce MAGI

[JG EA]

Yes, ST that was the exact situaiton.

Thank you all very, very much! I'm not into the confidence part of tax season yet. Still second guessing everything.

[veritas]

If the congress passes a Health bill

what do you want to bet the HSA as we know it will still be around?

[JG EA]

Neither will I be around (doing taxes I mean) - I can't afford to pay for health insurance for others, and I can't do this job by myself.