Health Savings Accounts
If you or your employer are tired
of sending hundreds and hundreds
of dollars each month to your
health insurance company, and
would prefer to keep a big chunk
of that money for yourself to
spend on health expenses or save
it for the future, then you need
to look into a Health Savings
Account.
Is there an IRS approved list of
medical expenses that I can spend
my tax free Health Savings
Accounts funds on?
Yes, there is list of allowable
expenses published by the U.S.
Treasury Department, actually the
Internal Revenue Service, referred
generally as the ‘213 (d)’ list,
since it appears in IRS regulation
213 (d). Here is a link to the
list of allowable/not allowable
expenditures:
http://www.irs.gov/pub/irs-pdf/p502.pdf.
In general, you can spend tax-free
from your Health Savings Account
on all medical, dental (including
braces for your children), and
vision expenses, chiropractic
visits, and even acupuncture, but
not on your insurance premium,
unless you are unemployed and are
collecting Federal unemployment
benefits.
Treasury,
IRS Issue 2009
Indexed Amounts for Health
Savings Accounts
Washington,
DC--The
Treasury Department and Internal
Revenue Service today issued new
guidance on the maximum
contribution levels for Health
Savings Accounts (HSAs) and
out-of-pocket spending limits
for High Deductible Health Plans
(HDHPs) that must be used in
conjunction with HSAs.
These amounts have been indexed
for cost-of-living adjustments
for 2009 and are included in
Revenue Procedure 2008-29, which
announces changes in several
indexed amounts for purposes of
the federal income tax.
The new levels are as
follows:
New Annual Contribution
Levels for HSAs:
-
For 2009, the maximum annual
HSA contribution for an
eligible individual with
self-only coverage is
$3,000.
-
For family coverage, the
maximum annual HSA
contribution is $5,950.
-
Catch up contribution for
individual who are 55 or
older is increased by
statute to $1,000 for 2009
and all years going forward.
-
Individuals who are eligible
individuals on the first day
of the last month of the
taxable year (December for
most taxpayers) are allowed
the full annual contribution
(plus catch up contribution,
if 55 or older by year end),
regardless of the number of
months the individual was an
eligible individual in the
year. For individuals who
are no longer eligible
individuals on that date,
both the HSA contribution
and catch up contribution
apply pro rata based on the
number of months of the year
a taxpayer is an eligible
individual.
New
Amounts for Out-of-Pocket
Spending on HSA-Compatible
HDHPs:
-
For 2009, the maximum annual
out-of-pocket amounts for
HDHP self-coverage increase
to $5,800 and the maximum
annual out-of-pocket amount
for HDHP family coverage is
twice that, $11,600.
Minimum Deductible Amounts for
HSA-Compatible HDHPs:
-
For 2009, the minimum
deductible for HDHPs
increases to $1,150 for
self-only coverage and
$2,300 for family coverage.
In addition, a
fiscal year plan that satisfies
the requirements for an HDHP on
the first day of the first month
of its fiscal year may apply
that deductible for the entire
fiscal year.
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