On Sep 11, 1:30 pm, "D. Stussy" <s...[at]bde-arc.ampr.org> wrote:

- quote -

And there are also catch-up contributions for those 55 and older,
which for 2008 is $900.

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D. Stussy wrote:
....

- quote -


Only if you take what he wrote out of the context of his reply to the
previous comment that spoke of there being a penalty. It's clear what
was intended in context (to me, anyway).

--

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"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:eyYxk.22546$uE5.2559[at]flpi144.ffdc.sbc.com...
- quote -

That's not what you wrote (above). What you wrote indicates NO penalty
BELOW age 65.

Also, it's not the actual date, but the first of the month of the month
FOLLOWING your age change if your birthday is not on the first. Remember
that the qualifying date is the first of each month and what happens later
in the month makes no difference.

- quote -

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<removeps-groups[at]yahoo.com> wrote in message
news:e0cfb49d-f32e-4493-bd8d-56092d7f9b66[at]v13g2000pro.googlegroups.com...
- quote -

For 2008. Note that the limits are adjusted every year for inflation.

- quote -

Not listed at the above URL is State Farm Bank. They also administer HSAs.

Info: http://www.statefarm.com/bank/bank_accnts/hsa/hsa.asp

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Mark Bole wrote:
- quote -

Or, maybe it was my convoluted syntax. ;-) Let's try this:

Quote: Penalties may apply [...]

Reply: Yes, up until age 65. But then, after that, no penalty applies,
just tax.

-Mark Bole

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D. Stussy wrote:
[...]
- quote -

Thanx. Looking further, I see that employers can subsidize some or all
of the HDHP premiums and still allow (and even contribute to) an
employee's HSA, so now I'd say the answer is yes, SE health insurance
deduction for HDHP *and* HSA deduction can both be taken.

In Stu's case, this would minimize annual premiums and still allow full
deduction for just the amount of extra expenses incurred. But if
looking to sock away more money for retirement, might as well fund the
HSA up to the max.

-Mark Bole

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D. Stussy wrote:

- quote -

I must be missing your point. The instructions confirm that 10%
additional tax does not apply to HSA distributions included in income
after age 65 is reached (based on actual date your age changes, not the
full year).

BTW, in case it wasn't clear, what I meant by "HSA a lot like an IRA" is
that after a certain age (65 and 59.5, respectively), no excise tax
(a.k.a. 10% penalty) applies to distributions, no matter what they are
used for.

-Mark Bole

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Sep 10, 1:12 pm, Mark Bole <ma...[at]pacbell.net> wrote:

- quote -

There's no reason to lose even $10 in your FSA. Just buy some OTC
medicines that you or your family use from time to time -- like
Tylenol, NyQuil, etc. At http://www.drugstore.com/ they even list
which items are FSA eligible.

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On Sep 10, 12:00 pm, Stuart Bronstein <spamt...[at]lexregia.com> wrote:

- quote -

Here are some FAQ's about it:

http://www.ustreas.gov/offices/publi...cipation.shtml

There's flexibility as to whether it will be through payroll
deductions, equal amounts, pre-tax or post-tax, employer matching.
You can open an HSA in the middle of the year and contribute the full
amount.

You need a high deductible plan, and your plan administrator can tell
you if the plan is high deductible. Basically, high means for
individuals: $1,100 deductible, $5,600 out of pocket.
http://en.wikipedia.org/wiki/High_De...le_Health_Plan. But a
search I did on ehealthinsurance.com put the deductibles at $2,700 to
$5,000.

The maximum amount a single filer can contribute is $2,900.

What I'm not finding easily is companies that offer HSA's for
individuals. Easy to find IRA options at Fidelity, ETrade, etc. But
options do exist, and they keep expanding. See
http://www.ehealthinsurance.com/ehi/...inistrators.ds for example.
You can pick mutual funds, stocks, cash. Of course, if you have an
HSA through your employer, then the options are limited to whatever
they decided on. But then, when you leave your job, you can rollover
your HSA at your employer's company to your own individual company
which has all the choice.

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"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:QSVxk.24816$xZ.16859[at]nlpi070.nbdc.sbc.com...
- quote -

The RevProcs have addressed prior year reimbursements, but not as an extreme
position (30 years) as you have suggested. They're written with a style
that implies 1-4 years after the fact.

HSA's were created for tax year 2004. Therefore, expenses paid before
January 1, 2004 never qualify for reimbursement. Per a special rule, for a
person who opened the HSA before April 15, 2005, all of 2004 (and the first
3.5 months of 2005) was eligible for reimbursement. Otherwise, only
expenses paid after the opening of the HSA qualify.

- quote -

As long as you're counting the 10% additional tax (in addition to the income
tax) as a tax and not a penalty, I agree. See form 8889, Line 17.

- quote -

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"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:uOWxk.19705$LG4.3692[at]nlpi065.nbdc.sbc.com...
- quote -

I don't recall seeing that as prohibited.

- quote -

Furthermore, amounts paid from an HSA don't qualify as medical expenses on
Schedule A.

Things that many people may not realize: As one can reimburse one's self in
a later year from an HSA for a medical expense NOT paid via the HSA, one has
to TRACK such expenditures as when the reimbursement in a later year occurs,
that distribution is tax free (to the extent that no deduction was taken).
If a distribution is taken to reimburse for an open year where a deduction
occurred, one must amend the back year (per statute - as the deduction no
longer qualifies). One cannot make a tax free distribution to reimburse for
a closed year where a deduction occurred (per various RevProcs). Also note
what can happen when there's an NOL CB changing the deductibility of a
medical expense as a result of AGI changing and there's a reimbursement
made. I believe that none of this was considered when Congress wrote the
statute (IRC 223?).

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Stuart Bronstein wrote:
- quote -

I don't see why not, as long as the plan custodian doesn't prohibit it
(they might not want the administrative expense of handling small,
irregular contributions).

That's not really the idea behind the plan, of course. First, to have
an HSA you also need an HDHP (high deductible health plan). Health
insurance premiums are not themselves qualified expenses for the HSA.
So, as a self-employed person, you could just get a "regular" health
plan with small deductibles (i.e. few if any expenses paid out of
pocket), and take the self-employed health insurance deduction for your
premiums.

You raise an interesting question I don't know the answer to, can
self-employed person take SE health insurance deduction for HDHP
premiums, in addition to qualifying for deductible HSA contributions?
This sounds a lot like being covered by some other employer plan, which
eliminates the HSA eligibility.

- quote -

HSA contributions are an adjustment on the front page of Form 1040, just
like an IRA (first you fill out Form 8889).

-Mark Bole

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Mark Bole <makbo[at]pacbell.net> wrote:
- quote -

Thanks! I'm self employed. What I was wondering was whether I can
make deposits pretty much as I need them to then withdraw for medical
purposes.

Does this get reglected on Schedule C or Schedule A?

Stu

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Stuart Bronstein wrote:
- quote -

If the plan is through your employer, then most likely you have regular
wage deductions each pay period. If not through your employer, you have
up to the due date of the return to fund it.

-Mark Bole

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Paul Thomas, CPA wrote:
- quote -

In many ways, an HSA is like an IRA. No, you do not have to withdraw
money in the same year your put it in. If you only have enough to fund
one or the other, the HSA may be slightly more advantageous than the
IRA, and not any worse. It depends on your other options for
tax-favorable treatment of medical expenses and insurance coverage, and
how healthy you are going to be in the future.

- quote -

Even if you end up leaving a little on the table in an FSA (forfeited
amount), you still could come out ahead based on not paying FICA on your
contributions. Forfeit too much, that benefit disappears.

There is also the HRA (health reimbursement account), which your
employer might offer (they have to fund it, not the employee). The
balance in that can be carried over from year to year but only used for
qualified medical expenses, otherwise it becomes ordinary taxable
compensation.

Also, one minor note, new Archer MSA's have not been available for
several years now, IIRC only about 60,000 were ever opened.

- quote -

Last year I was convinced by contributors in another newsgroup that the
qualified medical expenses didn't even have to be for the current year,
but can be for a prior year, as long as incurred after the HSA was
created. In an extreme example, you could pay 30 years of medical
expenses out of pocket with after tax dollars, all the while building up
an HSA balance, then use the thirty years' worth of qualified expenses
to withdraw the HSA money tax-free. Don't know if this has been
clarified or changed in the tax law, I wouldn't exactly recommend it as
a strategy anyway.


- quote -


Up until age 65 (or date you become disabled or die), then no penalty
applies, just tax. This is how an HSA is a lot like an IRA, plus no RMD
(required minimum distribution).


- quote -

Either. But you are not eligible for an HSA if covered through some
other employer-sponsored health care plan.


-Mark Bole

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"Paul Thomas, CPA" <paulthomascpapc[at]bellsouth.net> wrote:

- quote -

I'm familiar with the concept of these accounts, but know next to
nothing about the details. How are they funded? That is to say, are
you required to make regular equal payments?

Thanks.

Stu

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Antoine Bruguier" <tony.bruguier[at]gmail.com> wrote

- quote -


There are HSA (Health Savings Accounts), MSA (Medical Savings Accounts) and
the booger FSA (Flexible Spending Accounts). The FSA's REQUIRE that money
you put in is spent in that year. So be absolutely positively 100% sure you
know what type of plan your employer is offering.



- quote -



Funds you contribute to an HSA or MSA are not required to be spent in the
same year. Funds not used in the year of contribution are carried over to
future years to pay qualified medical expenses. Penalties may apply if the
funds are used for something other than qualified medical expenses.






- quote -


You need to talk to your insurance carrier, who will inform you of all the
rules and exclusions. This is not a DIY project. It's a packaged product
the insurance company helps you establish. Limitations and restrictions
apply, so get to know what it is you are getting.

If your (or your spouse's) employer offers coverage, you may be disqualified
to take out an MSA/HSA.






--
Paul A. Thomas, CPA
Watkinsville, Georgia

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Hello everyone,

Sorry to post here, but I am quite confused by Health Savings Account
(HSA). The plan I have at work suggests that I have to spend the money
on the same year I put it in. However, I have heard that some people
are using HSAs as IRAs, basically investing money and letting it
compound.

I am in the lucky position to be healthy and have extra money, but
that may not last. I am thinking about putting money in an HSA and
letting it sit there, for more than a year.

1) Is this possible to do it this way? Am I required to spend it on
the same year?

2) Am I required to do this through my work (like a 401k), or can I do
it through a third part (like an IRA)

3) Any recommendation on companies?

Thanks in advance,
Tony

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >