Your Health Savings Account Saving Money On Health Insurance
Let's talk about how a health savings account can help you lower your taxes.
First of all, a Health Savings Account is kind of like an IRA. Its an account where you can put pretax dollars that can then later be used to pay for medical expenses, tax free. So, the contribution limit in 2010 for an individual is $3050.00. Thats how much an individual can put into their HSA each year and that amount actually goes up a little bit each year based on the cost of living. For a family, you can deposit up to $6150.00 in the HSA and then if you're over age 55, you can contribute an additional $1000.00 into the HSA. This contribution is deducted directly from your adjusted gross income.
So lets look at how much money this can save you. If you're under the 28% tax bracket and if you are in the state with a 5% state income tax, lets do the math here, so a $6150.00 contribution is going to reduce your federal income taxes by $1806.00. You will reduce your state income taxes by $380.00 for a total of $2186.00. Now, if you're paying $350.00 a month for your health insurance, your tax savings are going to save you six months worth of premiums, paying for a half the years health insurance premiums just with the money you save from your tax reduction.
In addition to that, HSA qualified health insurance plans are about 40% less expensive than conventional co-pay plans, so you could easily look at saving another two or three thousand dollars or more on your health insurance premiums if you switch from a co-pay plan to an HSA plan.
For a lot more great information and free access to our online instant quote system, go to www.HSAforAmerica.com.
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