Having a Health Savings Account (HSA) may benefit you. Some of the benefits are:
- Even if you don't itemize deductions on Form 1040, you may take a tax deduction for contributions you, or someone other than your employer, make to your HSA.
- HSA contributions made by your employer may be excluded from your gross income (including contributions made through a cafeteria plan).
- You do not have to use the contributions in your account from year to year. The funds will remain there until you use them. You can even change jobs or switch to another high-deductible health plan and your money will still be there.
- Other earnings or interest on the assets are tax free in the account.
- If you pay for qualified medical expenses with an account distribution; the distribution may be tax free.
- You may take your HSA with you when you change employers or leave the work force because the account is "portable".
For more information on HSAs, see: