The Triple Tax Advantage of a Health Savings Account
Your health savings account is pretty much a tax savings mecca. Yeah, we said it. The triple tax advantages of a health savings account, all right here.
1. Reduce your annual taxable income. Do you know anything about the triple tax advantages of a health savings account? No? That’s ok. We’ve got it all right here. By putting pay into your health savings account (HSA) before taxes are calculated (pre-tax), you’re significantly reducing your annual taxable income. This means that every single dollar you contribute is a tax-free dollar. And that’s pretty sweet.
2. Never get taxed on qualified medical expenses. As long as your contributions are withdrawn for qualified medical expenses, you won’t be taxed … ever. And since we all have medical costs of some sort, having an HSA is bound to help lower the overall amount you pay for healthcare over time. It’s a win-win of epic proportions.
3. Gain on investments without the tax burden. Investment gains in an HSA aren’t taxed. This means that your money can really accumulate over time. And since you don’t have to tap your HSA until you actually need it, you can watch your money grow tax-free while it hangs out in your account.
The benefits of pre-tax contributions, tax-free withdrawals on qualified medical expenses, and tax-free earnings can add up to some seriously significant savings. You know what that means: your money stays out of the hands of Uncle Sam, and just keeps on growin’. Woo!