The savings limits for the ever-popular health savings accounts (HSA) are now set for 2020. The new limits are outlined here with current year amounts noted for comparison.
An HSA is a tax-advantaged savings account whose funds can be used to pay qualified health care costs for you, your spouse and your dependents. The account is a great way to pay for qualified health care costs with pre-tax dollars. In fact any investment gains on your funds are also tax-free as long as they are used to pay for qualified medical, dental or vision expenses. Unused funds may be carried over from one year to the next. To qualify for this tax-advantaged account you must be enrolled in a high-deductible health plan (HDHP).
Note: An HDHP plan has minimum deductible requirements that are typically higher than traditional health insurance. To qualify for an HSA, your coverage must have out-of-pocket payment limits in line with the maximums noted above.
Not sure what an HSA is all about? Please call to discuss whether an HSA is right for you.
As always, feel free to pass this Tip along to friends, and reach out if you need help with your personal tax and finance situation.