Understanding the Tax Benefits of High Deductible Health Plans
Michael A York (son of Gary A York, 1939-2016)
Michael A York & Associates encourages tax-advantaged ways to help save money for future medical expenses. One method in which this can be done is through enrolling in a High Deductible Health Plan (HDHP). We believe that this strategy fits in with Michael A York & Associates' mission of saving individuals and businesses money, which was also the key goal of Gary A York & Associates.
An HDHP incorporates Health Savings Accounts (HSAs) or Health Reimbursement Arrangements (HRAs) with traditional medical coverage. HSAs allow you to deposit pre-tax funds into the account and the balance in the HSA grows tax-free. In order to be eligible for HSAs, you must be enrolled in an HDHP, not enrolled in Medicare, not receiving VA or IHS benefits, not covered by a Flexible Spending Account (FSA), and not claimed as a dependent on another tax return. Contact Michael A York & Associates today at 801-REFUNDS to discuss this option further.
If you use distributions from your HSA for qualified medical expenses, then they can be withdrawn tax-free. However, if distributions are used for other items, then they will be treated as income and taxed accordingly. Additionally, if you are under 65 years old at the time of distribution, distributions will be subject to a 20% penalty tax.
As always, please make sure to follow up with Michael A York & Associates to discuss these strategies further and search for even more ways to save you money. At Michael A York & Associates, we want to make sure that you don't miss out on strategic ways to reduce your tax obligations. Contact Michael A York & Associates today at 801-REFUNDS to look for even more ways to save money.
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