Understanding Health Savings Accounts - Savings For Retirement Health Expenses

Changes to the Health Savings Account rules from 1 January 2007, a new interest in the plans generated. However, there is a gap in knowledge regarding the actual use of the plans. A recent article on Health Savings Accounts published in The Wall Street Journal Online and asked questions about the possibility of using an HSA as a savings vehicle for future expenses verses use of funds in the HSA to report immediately to medical costs. The article implies that there was aeither / or choice.

Many HSA users are not aware that the IRS allows HSA savers and investors, both donor be.

As a franchisee of the Entrust Group, we offer training courses for employers, employees and professional advisors, teaching about the rules of HDHPs and HSAs are linked. Surprisingly few consultants and even fewer users really understand how the HSA works.

Contrary to popular belief, there is no effort under HSA distributions for medicalExpenses. In other words, HSA owners who choose to pay their medical expenses from their personal funds, rather than move immediately on to a refund of fees from their HSAs, the refund until they really need the money. In the meantime, continue to grow the funds tax-free. The longer the funds remain under the protection of the HSA, the more you grow. Today's glasses can be paid out of pocket and then reimbursed from the HSA, the next day of the nextYear or 20 years. The choice is up to the HSA owner. Thus, if a person comfortably bear the cost personally, then there's really no reason why the money from the HSA to take. The taxpayer is not the role of the chance to take a refund by the delay. Thus, fueled by additional resources, the HSA are looking for longer-term, higher yield investments. Our customers who are in the longer term, investors tend to favor this approach because it enables more stability in the current andGrowth potential.

Likewise, many taxpayers do not know that expenses on the HSA balance can be repaid in subsequent years. The only requirement is that the HSA was established to have, before the cost to bring. Unfortunately, the IRS Form 8889 does not show this "carry-forward charges" many tax preparers can help customers to track the costs, which have not yet been repaid.

When the pursuit of these expenses will be reimbursed un -crucial for determining how much of the HSA balance is ready for free distribution tax matter in a way, our company has created an "un-reimbursed expense tracking system to organize our customers and to document their un-reimbursed costs.

Please contact us for more information on the use of an HSA for long-term investments or visit us for a WebEx seminar to introduce the basics of the HSA / High Deductible Health Plan combinations. Bill Humphrey, a director of Entrust New Direction IRAColorado (www.NewDirectionIRA.com) is a champion of Health Savings Accounts since their inception in 2004. Bill is a CPA in Colorado and has clarified the development of education programs for accountants and health plan to work the understanding and use of the HSA. Entrust New Direction has programs live via the Internet to users and employers expect adoption of HSA high deductible health plan for their company.

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