Financial Strategy
Financial Strategy
3 . The HSA ( Health Savings Account )
These plans are tax-favored savings accounts combined with a qualifying high-deductible health insurance plan . They allow taxpayers to deposit taxdeductible funds into a health savings account that can be used to cover medical costs . The contribution limit will change each year and is adjusted for inflation , but is generally similar to the IRA contribution amounts . You do not have to have a small business to set up an HSA , however you must have a qualifying high-deductible insurance policy .
Potential Tax Savings The business can write off 100 % of what is paid for the employee ’ s health insurance plan and the employee can write off 100 % of what is placed in the Health Savings Account .
There are several key benefits of the Health Savings Accounts that I think are amazing . They are :
• You save money on your insurance premiums with the high-deductible insurance plan .
• The HSA contributions are fully deductible and not subject to the Schedule A medical phase out described above .
• If you don ’ t use the money in the HSA by yearend , it carries forward for the rest of your life .
• You can pull out the money for qualifying health-care expenses tax free .
• If you don ’ t want to use the funds for health care , you can pull out the funds like a traditional IRA and pay taxes after you turn 59 and a half years old .
• You can invest the money in essentially anything and grow the account tax-free .
• Finally , the HSA enables you to take control of your own health-care decisions because you are paying directly for your medical care out of your savings account .
Due to the fact that health care costs are rising every year and since the ability to deduct health care costs from income can result in large tax savings , it is important that a business owner take a serious look at how the business handles medical and health care costs of its owners and employees . This is just too large of an issue to simply ignore .
If you happen to be involved in a business without an active plan or if you happen to be the sole owner / operator of your business , and currently do not have a plan , we would recommend that you seriously consider the tax reduction benefits available to a business with a well thought out plan .
In future newsletters we will plan to discuss the tax savings options contained in the various available company sponsored retirement plans and most importantly we want to examine the “ wealth building ” concepts that can allow you to legally reduce your tax burden while building an income stream for life and amassing great wealth .
As before , remember that we at Book Ease , Inc want to help you find the answers that are very difficult to locate elsewhere . Hopefully this will provide you with an unfair advantage over your competition . DCS
By Ross Brunson , President of Book Ease , Inc .
The information and opinions presented are for educational purposes only and are not intended as legal , investment or tax advice . No guarantees are made as to the accuracy of the information provided herein . Situations can change from day to day . Every individual , business person and / or investor should do their own due-diligence to determine which investments , legal and tax strategies are best for them .
You must assume the responsibility and liability for all decisions that you make on the basis of the information herein contained . Book Ease , Inc . makes no warranties , expressed or implied , as to the fitness and accuracy of the information provided or for the results obtained by using the information .
Those making investment , legal and tax decisions based on any of the information presented should do so in the knowledge that they could experience significant losses . In no event shall Book Ease , Inc . be liable for direct , indirect , or incidental damages resulting from the use of the information .
Insider Journal | 17