Hannah Newberry, AFC’s Post

𝗨𝗦 𝗧𝗔𝗫𝗔𝗧𝗜𝗢𝗡 : 𝗦𝗮𝘃𝗲 𝗼𝗻 𝗛𝗲𝗮𝗹𝘁𝗵𝗰𝗮𝗿𝗲 𝘄𝗶𝘁𝗵 𝗙𝗦𝗔𝘀: 𝗔 𝗤𝘂𝗶𝗰𝗸 𝗚𝘂𝗶𝗱𝗲 #USTaxation,#FSA,#TaxSavings 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗮𝗻 𝗙𝗦𝗔? An FSA, or Flexible Spending Account, lets you set aside pre-tax 𝗺𝗼𝗻𝗲𝘆 𝗳𝗿𝗼𝗺 𝘆𝗼𝘂𝗿 𝗽𝗮𝘆𝗰𝗵𝗲𝗰𝗸 𝘁𝗼 𝗰𝗼𝘃𝗲𝗿 𝗾𝘂𝗮𝗹𝗶𝗳𝗶𝗲𝗱 𝗺𝗲𝗱𝗶𝗰𝗮𝗹 𝗲𝘅𝗽𝗲𝗻𝘀𝗲𝘀. Think of it like a tax-advantaged savings account for healthcare costs. 𝗕𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗼𝗳 𝗙𝗦𝗔𝘀: 𝗦𝗮𝘃𝗲 𝗼𝗻 𝘁𝗮𝘅𝗲𝘀: Contributions are deducted from your paycheck before taxes, lowering your taxable income. 𝗧𝗮𝘅-𝗳𝗿𝗲𝗲 𝘄𝗶𝘁𝗵𝗱𝗿𝗮𝘄𝗮𝗹𝘀: When you use your FSA for qualified medical expenses, the money comes out tax-free. The maximum amount you can receive tax free is the total amount you elected to contribute to the health FSA for the year. 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗲 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀: This is sometimes called a “salary reduction agreement 𝗘𝗺𝗽𝗹𝗼𝘆𝗲𝗿 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀: Some employers even contribute to your FSA, boosting your healthcare savings.Contributions made by your employer to provide coverage for long-term care insurance must be included in income You don’t pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. 𝗛𝗼𝘄 𝗱𝗼 𝗙𝗦𝗔𝘀 𝘄𝗼𝗿𝗸? 𝗘𝗹𝗲𝗰𝘁 𝘆𝗼𝘂𝗿 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻: At the beginning of the year, choose how much you want to set aside in your FSA. 𝗣𝗮𝘆𝗿𝗼𝗹𝗹 𝗱𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻: This amount is automatically deducted from each paycheck throughout the year (typically). 𝗨𝘀𝗲 𝘆𝗼𝘂𝗿 𝗳𝘂𝗻𝗱𝘀: Pay for qualified medical expenses with your FSA funds. Important: Unused funds at year-end may be forfeited (check with your plan). 𝗖𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 𝗟𝗶𝗺𝗶𝘁𝘀: The maximum contribution for FSAs is set by your employer and the IRS (Can't be more than Lower of $3,050 annually for tax year 2023 or Amount set by plan ). Remember: FSAs are a great way to save on healthcare costs, 𝗯𝘂𝘁 𝗽𝗹𝗮𝗻 𝘆𝗼𝘂𝗿 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀 𝗰𝗮𝗿𝗲𝗳𝘂𝗹𝗹𝘆 𝗮𝘀 𝘂𝗻𝘂𝘀𝗲𝗱 𝗳𝘂𝗻𝗱𝘀 𝗺𝗶𝗴𝗵𝘁 𝗯𝗲 𝗹𝗼𝘀𝘁. Consult your employer's plan details and a healthcare provider to see if an FSA is right for you. LinkedIn LinkedIn Guide to Creating LinkedIn Ads LinkedIn News #Finance #TaxReporting, #UStaxation, #UStaxes, #TaxPlanning, #TaxCompliance, #TaxStrategy,

Decoding Flexible Spending Arrangements(FSA) #USTaxation,#EnrolledAgent,#EAAspirant,#EACourse,#TaxUpdates,#TaxLaw LinkedIn Guide to Creating LinkedIn Ads LinkedIn Learning

Tax Strategies for Paying Medical Expenses: Health savings accounts (HSA) are tax advantaged arrangements that allow you to save for future health care expenses. The HSA payments are made from your paycheck.  You will have a deduction taken from your paycheck, pretax. For 2024, the maximum you can contribute is $4,300 if your plan is for just you or $8,550 if […] The post Tax Strategies for Paying Medical Expenses appeared first on USTaxAid. http://dlvr.it/T9SgPv #Tax #IRS #PFP

HSAs give you a triple tax benefit, but are you making the most of it? Unlike traditional IRAs or Roth accounts, Health Savings Accounts allow you to put money in tax free, grow your money tax free, and take that money out tax free, (so long as it's used for medical expenses). So, here are two strategies to consider . . . ➡️ #1: Deposit to Use This is the most common way we see people use HSAs. You know you have upcoming medical bills, so you contribute money to your HSA. Then as these bills come due, you take the money right back out. You don’t have to pay tax when you make your contribution or when you use it to cover those bills. In this sense, the HSA becomes something your money passes through, just to create a tax break. 📈 #2: Invest to grow. This is where you can leverage the triple tax advantage. Instead of moving the money in and then out again, invest it there. Yes, this opens you up to risk just like an IRA, but now you can create growth. This creates a dedicated pool of assets, completely tax free, to cover your future medical needs. Of course there are pros and cons to both strategies, and that’s why you need to understand the needs for your specific financial plan. 📰 To learn about each, check out Rob’s article “Everything You Need to Know About Health Savings Accounts.”

To Use or Not Use an HSA... 🔶 Medical Bill: $1,000 Paying with checking acct: ▶️ $1,333 earnings - 25% tax = $1,000 for bill Paying with HSA: ▶️ $1,000 earnings - 0% tax = $1,000 for bill _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Q: What if my employer 🏢 doesn't offer an HSA? A: You can open an HSA on your own. Q: What if I don't use my HSA funds by the end of the year? A: The funds in an HSA don't expire. They roll over in full each year. ♻️ Q: Don't I have to remember to bring my HSA card 💳 to the doctor? A: Typically, no. You can use your credit or debit card and simply reimburse yourself through your HSA portal later on. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 🌐 Required supporting article: (https://lnkd.in/erCZkS7c) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ #investing #financialplanning #taxefficiency _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Disclosures: 🔹I do not sell HSA accounts and we do not hold them at Ameriprise. However, they are an effective tool that I recommend to my clients when appropriate. 🔹 The example above assumes a 25% effective income tax rate. Your tax rate may differ.

Don’t miss out on any available tax benefits to help you care for your loved one without depleting your own funds. For specifics, we recommend speaking with a tax professional, but here are some points to consider: 1. Claiming Your Loved One as a Dependent: If you've provided more than half of your loved one’s support throughout the year—such as food, lodging, transportation, etc.—you may be able to claim them as a dependent. 2. HSA and FSA: Utilize a health savings account (HSA) or flexible spending account (FSA) through your benefits. These accounts help cover expenses not covered by insurance and are deducted from your gross income, reducing your taxable income. 3. Claiming Allowable Expenses: If your loved one qualifies as a dependent, you might be able to deduct expenses when filing your return. This includes transportation costs like cab fare, mileage, tolls, and parking for medical appointments. For personalized advice, consult a tax professional to ensure you're maximizing your tax benefits as a caregiver. #TaxBenefits #CaregiverTaxTips #FinancialSupport #CaregiverResources #TaxSeason #CaregiverSupport #HomewatchCareGivers

Are you overlooking the secret weapon in your tax strategy arsenal? 🤔 In the world of tax planning, we often stick to the tried-and-true. But what if there's a powerful tool flying under your radar that could transform your financial future? 🚀 Meet the Health Savings Account (HSA). It's not just a tool for handling medical expenses—it's a triple-tax-advantaged powerhouse. Every dollar you contribute is tax-deductible, growth remains tax-free, and qualified medical withdrawals glide by untaxed. And here's the kicker: after age 65, those funds can be repurposed for non-medical expenses, taxed similarly to a traditional IRA but without penalties. 💭 Imagine effectively reducing your taxable income today while building a safety net for tomorrow’s healthcare needs—or any future expense. It's more than just a medical savings account; it's a versatile financial ally. What role does the HSA play in your tax strategy?

🚀 Welcome to Tax Quiz Wednesday! Today's quiz dives into the world of Health Savings Accounts (HSAs) and their tax implications. Are you ready to test your knowledge? Questions: Q1: What is the maximum contribution limit for an individual to an HSA in 2023? A. $2,500 B. $3,000 C. $3,600 Q2: Can individuals aged 65 and older contribute catch-up contributions to their HSAs? A. Yes B. No Q3: Are HSA distributions for qualified medical expenses taxable? A. Yes B. No ✏️ Ready for the answers? Scroll down! Answers and Explanations: A1: The correct answer is C. $3,600. Individuals can contribute up to $3,600 to an HSA in 2023 if they have qualifying high-deductible health plans. A2: The correct answer is A. Yes. Individuals aged 65 and older can contribute an additional $1,000 in catch-up contributions to their HSAs. A3: The correct answer is B. No. HSA distributions for qualified medical expenses are not taxable, making them a tax-advantaged way to cover healthcare costs. 💼 How did you score on today's quiz? Share your results and stay tuned for more tax insights next week! Navigating healthcare tax benefits with ease! #TaxQuizWednesday #HSA #TaxRules #InsightersTaxAcademy #taxprepcareer #taxtipstricks #taxeducation #taxindustryinsights #taxpreparationskills #taxprofessionals #careerintaxation #taxprepguide #taxplanningstrategies #StartYourOwnTaxBusiness #taxacademyonline

If you fund your HSA, then don't use it for medical expenses, the amount of your medical expenses basically becomes a tax-free investment account. Let me explain: Let's assume you can make 5% on your cash (for easy math, and because that's where rates are as of the time of this post). We're also going to assume that you marginal federal tax rate is 22%. You have $10,000 in your HSA and $10,000 in your high yield savings account. This year, you have a $5,000 medical expense. Option 1: Use your HSA. Now you have $5,000 in your HSA and $10,000 in your high yield savings account. Tax-free interest in your HSA = $250 Taxable interest in your high yield savings = $500, less taxes of $110 (22% times $500). Interest net of taxes = $390. New HSA balance: $5,250 New high yield savings balance: $10,390 Total balance: $15,640 Total accessible without penalty: $10,390 (only your high yield savings) Option 2: Use your high yield savings account Now you have $10,000 in your HSA and $5,000 in your high yield savings account. Tax-free interest in your HSA: $500 Taxable interest in your high yield savings: $250, less taxes of $55 (22% times $250). Interest net of taxes = $195. New HSA Balance: $10,500 New high yield savings balance: $5,195 Total Balance: $15,695 Total accessible without penalty: $10,195 (your high yield savings balance, plus the $5,000 from your HSA that is now reimbursable at any time, tax free). This strategy isn't for everyone, but it can be a powerful way to save money on taxes and still have access to your funds.

Are you fully utilizing your HSA? What a weird question. Who asks things like that? Mental gymnastics. That's what it felt like trying to understand this HSA strategy. It took me quite some time, so don't feel bad if you don't get the idea right away, but I hope my example below helps.