What is Health Savings Accounts (HSAs)? It's a type of investment account that can be used to pay for qualified medical expenses. They are often paired with high-deductible health plans (HDHPs) and offer a number of benefits to entrepreneurs. Let's breakdown what this includes:
1. Tax Savings
Contributions to an HSA are tax-deductible, and the funds in the account grow tax-free. Withdrawals for qualified medical expenses are also tax-free.
HSAs are portable, meaning you can take them with you if you change jobs or retire.
3. Investment Options
Many HSA plans offer investment options, such as mutual funds, allowing you to potentially earn a return on your contributions.
HSAs give you control over how you use your healthcare dollars. You can choose to pay for current medical expenses or save the funds for future healthcare needs.
It's worth noting that to be eligible to contribute to an HSA, you must be enrolled in an HDHP. These plans generally have higher deductibles than traditional health plans, but they may also have lower premiums. Before deciding to invest in an HSA, it's important to carefully consider your healthcare needs and financial situation to determine if an HDHP and an HSA are right for you. Book a tax consultation today to determine if a HSA is right for you.