A Health Savings Account—HSA—allows employees covered by a High Deductible Health Plan (HDHP) to take a deduction for Adjusted Gross Income (AGI) for contributions to an IRA type account to pay for or to be reimbursed for qualified medical expenses. This article will explain the eligibility rules regarding qualified individuals, limits on contributions and withdrawals, treatment of distributions, reporting contributions and distributions on form 1040 and supporting schedules.
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A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur (those allowable for the medical expense itemized deduction). The qualified medical expenses are for the taxpayer, his or her spouse, and dependents even if they are not eligible to make contributions. If both spouses have an account, one spouse may use a distribution from his or her HSA to pay or reimburse expenses of the other spouse but both HSAs may not reimburse the same expenses. No permission or authorization from the IRS is necessary to establish an HSA. You set up an HSA with a qualified trustee which can be a bank, insurance company, or anyone already approved by the IRS to be a trustee of an IRA Read more
The two biggest ways to lower your 2013 taxes are to increase your deductions before the end of the year or decrease your income subject to tax.
(1) Make additional charitable contributions of cash or property-particularly unwanted household items and clothing. An excellent way to increase non-cash contributions is to make gifts of appreciated property, particularly securities. By doing this, you receive a donation for the fair value on the date of the gift. The big advantage of doing this instead of selling it and make a cash donation is not having to pay tax on the gain. If you do this discuss with your broker which securities would be best to donate. Your broker will take care of transferring the securities to your designated charity. Read more