Investment

» allancoleman - Form 5498 - SA

Those of you that are fortunate enough to have a Health Savings Account ( HSA ) , you should expect to receive in your mailbox as I did this morning a Form 5498 - SA from your HSA account custodian . HSA custodians aren't required to submit to the IRS the amount of your HSA deduction until May 31st because a taxpayer actually has until April 17th this year to claim any HSA decduction on their 2006 income tax return .

The amount on Form 5498 - SA should agree with the amount you claimed on line #25 - " Health savings account deduction Attach Form 8889 " . This line item falls down to line #36 and then is substracted from your " adjusted gross income " on line #37 . Like IRAs , the amount of your HSA account deposit is substracted from your adjusted gross income . HOWEVER , the amount of any expenditures you make from your HSA account durning the year are like a Roth account and are taxfree for qualified medical expenses as are any earnings in your HSA account .

The amount on this Form 5498 - SA IS sent to the IRS and should match the amount you put in Form 8889 and attached with your return . In my own company medical provider plans , participants were requested to send in a amended tax return when they discoved that the medical plan they had was NOT a HSA qualified plan even though their medical plan deductables were the same as the IRS regulation for a HSA . There is much more to a medical plan being HSA qualified then the plan deductables . There is also the particular drug benefits and other things so it's worth your while to check with your own medical plan provider to insure that their high deductable plan is in fact federal HSA qualified .

For those of you who use TurboTax , don't bother looking for Form 5498 - SA , because it doesn't exist in your TurboTax software . This is a special form used only by HSA custodians to report HSA account deductions to the IRS . Just file this form with your HSA account paperwork .

-- posted by allancoleman

» allancoleman - HSA limits for tax year 2008

In response to Form 5498 - SA posted by allancoleman:

The IRS has released the deposit limits for HSAs for next year , 2008 . For the joint family plan , the new limit is $5,800 . That's up from $5,650 this tax year of 2007 . In the single HSA plan the new limit for next year , 2008 , is $2,900 . That's up from the 2007 limit this year of $2,850 .

With the new " catch up provision " of $900 next year , that makes the maximum deposit possible in the joint family plan of $6,700 for next year and $3,800 possible for the single plan for those over age 55 .

-- posted by allancoleman

» TFD86 - HSA limits for tax year 2008

In response to HSA limits for tax year 2008 posted by allancoleman:
allancoleman----I was reading some of your posts from months past, & am over 55 & live in Ks. Are there qualifications for HSA's or can anyone purchase them? Our bank is putting an HSA plan together, & being new to this am wondering if you found (like mutual funds) there are big expense differences in who you use for a custodian. I'm excited about these tax deferred instruments & hope to establish one for '07 & then begin regular deposits beginning in '08.-----TFD86

-- posted by TFD86

» allancoleman - HSA limits for tax year 2008

In response to HSA limits for tax year 2008 posted by TFD86:

If you make your deposit before December 1st , TFD86 , you can make your 2007 tax year deposit for the full year annual amount . In past years , the IRS only allowed pro - rated deposits . In other words , if you make your deposit in November of one tax calendar year as I did several years ago , you could only deposit a 2 / 12th pro - rated share of the entire year's amount . I always make my annual HSA deposit in January of each tax year .

And please - please go to the federal HSA web site at :

http://www.ustreas.gov/offices/public-af...

and the HSA discussion board link at :

http://benefitslink.com/boards/index.php...

that I've given in the past to fully understand what you're buying by putting your money in these HSAs . And please do the research to see if your state follows the full federal guidelines for HSAs . NOT all individual states do . I love mine and present have over $14k in mine and will have over $20k after I make my 2008 deposit next year . Because I'll be going on Medicare in 2009 and won't be able to make additional HSA deposits , I intend to open a seperate individual HSA account in my wife's name for tax years 2009 and 2010 before she goes on Medicare herself in 2011 . That'll give us over $28k for health care expenses going forward after those dates .

I don't have my HSA account invested in anything fancy because I want the account funds entirely free to cover any checks I may have to write out of it any any given moment . Last thing I want is to have my HSA funds tied up in any investment that's going sour at any moment .

-- posted by allancoleman

» TFD86 - HSA limits for tax year 2008

In response to HSA limits for tax year 2008 posted by allancoleman:
Thanks for the reply, but after going to the websites given, it doesn't sound like I will be able to use the HSA since I do not have a high deductible health plan. Don't get me wrong, I have a 1,ooo deductible, but the info indicates the deductible qualification went above 1,000 beginning in '06. It was worth a try. Thanks again

-- posted by TFD86

» allancoleman - HSA limits for tax year 2008

In response to HSA limits for tax year 2008 posted by TFD86:

You're right , TFD86 , ONLY certain high deductable medical plans meet federal HSA guidelines . My own high - deductable plan doesn't kick in until I've pretty much paid out the first $10k in medical expenses . These high deductable HSA qualified medical plans aren't for your cheaper " co - pay " crowd . However , I do throughly enjoy the huge tax deduction I get for my HSA deposit every tax year . And they act just like IRAs and the earnings are completely taxfree if used for medical expenses including Medicare and extended care later after age 65 .

-- posted by allancoleman

» allancoleman - HSA help

" Savings account with debt card access ? HSA help "

http://www.diehards.org/forum/viewtopic....

I've had one of these HSAs for years now and have a debt card to go with it . Excellent tax deduction and can be used just like an IRA for pretty much any medical expenses taxfree , even after Medicare age later such as elderly care .

-- posted by allancoleman

» allancoleman - 2008 HSA deposit

Just returned from my Kailua - Kona post office where I mail out my 2008 HSA deposit to my custodian for the amount of $6,700 . This is a combination of $5,800 plus the $900 catch up provision for those over 55 . The check is dated for January 2nd of 2008 . This will give me a total of over $20k in my HSA account .

The total amount of my 2007 HSA deposit I'm now working with in my 2007 income tax return is $6,450 . As soon as I've worked up the tax benefits next year , I'll post that here .

The last full year HSA deposit I have figures for is 2006 and that was for the amount of $6,150 . And that resulted in a tax reduction of $1,537 . Or , in other words , that $6,150 deposit cost me $4,613 real dollars .

These HSAs are very similar to IRAs and are taxfree as long as they're used for medical expenses now and even later after Medicare age . Several presidential candidates heve called for expanded and less restrictive HSAs in their national health care platforms for the future .

-- posted by allancoleman

» rick_t - 2008 HSA deposit

In response to 2008 HSA deposit posted by allancoleman:

allan - how are your HSA balance monies invested??
fixed return or in equities?
I also deposit max HSA each yr (6450 last yr and will deposit 6700 this year to gain max tax benefits).
calculating this yrs ROTH IRA rollover from regular IRA will be a fun exercise to minimize tax hit...using quicken's turbo tax makes it very quick and easy to calc and recalc

-- posted by rick_t

» allancoleman - 2008 HSA deposit

In response to 2008 HSA deposit posted by rick_t:

I just have mine in a money market , rick_1 . Didn't want to get risky with my health money in stocks . I want to be able to write a check for medical expenses at any given time without worrying about whether I should sell a market position when the market is down ... like now .

Tax software does make Roth calculations easy ... almost fun . Especially when you consider we've put money away in a FOREVER TAXFREE investment vehicle . I'll be posting more on my HSA tax benefits and Roth conversion costs later this month as soon as I can get some accurate 1099's to work with .

-- posted by allancoleman