If you cash out the money before you’re 65 (and don’t use the money for qualified medical expenses), you’ll have to pay taxes on the amount, and you could be hit with a hefty 20% tax penalty. Some people even view their HSA as an added retirement account. Or you can use it for non-medical expenses, just pay your regular income tax. You can continue to withdraw the money tax-free for medical expenses. If you’re over 65, there are no stipulations on how you can use the money. HSA Qualified Expenses Cosmetic surgery (from trauma or disease), Operating Room Costs, Spinal tests Crutches, Organ transplant, Splints Dental treatment.If you’re under 65 and use the dollars for qualified medical expenses, you can withdraw the money tax-free.Since you own the account, the funds roll over year to year and the money stays with you - regardless if you leave your job or retire. There’s no “use-it-or-lose it” policy.The money can sit in your account and potentially grow over time, all of it tax-free. You can invest your funds, and the interest or income is tax-free.When you make contributions, your taxable income is reduced. Pub 502 doesnt seem to discuss savings plans, but my dentist is offering one. The money you contribute is tax-deductible. landon wrote: Wed 6:55 pm Pub 969 says that insurance premiums are not eligible HSA expenses unless they fall into specific categories.You can make deposits like you do with other personal bank accounts. You own the account, not your employer.After you enroll in a high deductible health plan and set up your HSA, you can begin contributing to the account.
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