STEPS:
- Your yearly income before paying taxes is called "gross" or "total" income.
- From this amount, you can contribute a maximum of $3.65k/yr = $0.3k/month into your HSA (Health Savings Account).
- Good HSA account providers allow investments in crypto/stocks/bonds/ETFs, etc.
- Choose the investment of your choice and start making monthly or yearly contributions.
- It is recommended that you pay for your health expenses out-of-pocket instead of HSA so that your PRETAX investment in your HSA account can grow without withdrawls.
- It is recommended that you keep all your health expenses receipts with you for later withdrawls in life when you need liquid cash from your HSA account.
- Remember, you're saving money because no federal (and most state/local) taxes are taken out of your contributions initially or ever (for qualified health expenses).
WITHDRAWL RULE for Roth IRA INITIAL INVESTMENT:
You can withdraw your principal/initial contribution penalty free & tax free ANYTIME for Health Expenses that qualify under HSA.
You can use your HSA to pay for eligible health care, dental, and vision expenses for yourself, your spouse, or eligible dependents (children, siblings, parents, and others who are considered an exemption under Section 152 of the tax code).
You can use your HSA to pay for eligible health care, dental, and vision expenses for yourself, your spouse, or eligible dependents (children, siblings, parents, and others who are considered an exemption under Section 152 of the tax code).
WITHDRAWL RULES for HSA:
- pay both penalty+tax: Any age, if not withdrawing for qualified Health Expenses.
- penalty+tax free: Any age, if withdrawing for qualified Health Expenses.
- pay taxes only: age > 65 if not withdrawing for qualified Health Expenses.
Disclaimers:
- All info listed above is for informational and educational purposes only.
- Info may change from year to year. Info listed here might be out-of-date.
- This list is not comprehensive. It is provided to you with the understanding that we are not engaged in rendering tax advice.
- The information provided is not intended to be used to avoid federal tax penalties.
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