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An important new tax rule, Health Savings Accounts (HSAs), may significantly lower your out of pocket costs for health care and cut your federal income tax bill.

• HSA contributions are tax deductible whether you itemize or not.
• HSAs allow individuals to defer money into an account on a pre-tax basis to be used for out of pocket medical expenses.
• HSA funds can be carried over from year to year and employer to employer.
• HSAs are available to high-earners and low-earners alike.
• HSAs can be set up by the self employed or even a nonworking spouse.
• HSAs are only available to individuals with a high deductible health plan (HDHP) with at least a $1,000 deductible for individuals or $2,000 for families.
• When made through a section 125 cafeteria plan employer and employee contributions to an HSA are exempt from federal payroll taxes.

This is just a quick overview of the HSA rules. If you would like to know more about whether HSAs are right for you, please feel free to call us at (360) 734-8715.