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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