Health Savings Accounts - A New Way to Defer Taxes
Health Savings Accounts have now joined IRAs, SEPs, and 401k’s as the latest way to defer paying taxes on your income. Though all of these accounts grow tax-deferred until retirement, a Health Savings Account is the only one of these tax-advantaged savings vehicles which also allows tax-free withdrawals when the money is used for medical expenses.
(PRWEB) April 13, 2005 -- Defer Taxes using IRAs, SEPs, 401k’s, and now
Health Savings Accounts.
There are several investment options tax-payers
can use to lower their taxable income, and most can be funded as late as April
15. In addition to IRAs, and 401k’s, many individuals now also have the
opportunity to put money aside in a Health Savings Account.
Health
Savings Account (HSA)
Health Savings Accounts became available in the
beginning of 2004, and are the latest way you can shelter your income from
taxes. They can be opened by anyone with a qualifying high-deductible health
insurance plan. For 2005 there is a contribution limit of $2,650 for
individuals, and $5,250 for a family. Any money deposited in the account is tax
deductible, and grows tax-deferred. The special advantage HSAs offer is the
money can be withdrawn from the account tax-free at any time to pay medical
expenses. It is for this reason why many financial advisors recommend the HSA be
the first of your tax-deferred accounts that are fully fund each year.
Individual Retirement Account (IRA)
Anyone with taxable income is
eligible to open an IRA. For 2004, you can put away $3,000 in your IRA. If you
designate your IRA as a Roth IRA, you must fund the money with after-tax
dollars, but you never have to pay taxes on the money when it is withdrawn.
Simplified Employee Pension (SEP)
SEPs allow small business owners,
and other self-employed individuals to place as much as 25% of their income into
their SEP account, where it will not be taxed until it is withdrawn. The maximum
annual contribution is $41,000.
401(k)
Many employers offer 401(k)
retirement accounts funded through pre-tax payroll deductions. These plans allow
you to contribute a percentage of your pay, with a maximum pre-tax contribution
dollar amount of $14,000.
Money for Retirement and Medical
Expenses
Health Savings Accounts have now joined IRAs, SEPs, and 401k’s as
the latest way to defer paying taxes on your income. Though all of these
accounts grow tax-deferred until retirement, a Health Savings Account is the
only one of these tax-advantaged savings vehicles which also allows tax-free
withdrawals when the money is used for medical expenses.
For more
information about how HSAs work and instant quotes on qualifying high deductible
health insurance plans, please visit www.HSAforAmerica.com, or call 866-254-5121.
About HSA
for America:
HSA for America is a nationwide brokerage firm specializing in
individual and family health insurance plans that are qualified to work with
Health Savings Accounts. HSA for America represents many different insurance
companies, offers instant quotes, online applications, and comparisons of HSA
administrators. HSA for America provides this information as a quick reference,
and it is NOT our intention to offer or provide tax advice.
Contact
Information:
Fred Adams
HSA for America
Toll-Free Phone: (866)
254-5121
Toll-Free Fax: (866) 284-0082
http://www.HSAforAmerica.com
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Source : http://www.prweb.com/releases/2005/4/prweb226080.htm