About Health Savings Accounts for Individuals
Health savings accounts provide individuals a way to put away tax-deferred money to pay for qualified health care costs. In much the same way as an individual retirement account, which remains free of income taxes until withdrawal, an HSA can enhance your investment portfolio and save you money at the same time.
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Qualification
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You must be a member of a high-deductible health insurance plan. The deductible for an individual must be $1,100 per year or higher.
Contribution
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As of 2008, you are allowed to save as much as $2,900 each year if you are a single individual. Those older than 55 may add an extra $1,000 per year to their HSAs.
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Limits
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There are no income limits. You may contribute to an HSA every year while you remain enrolled in a high-deductible health plan.
Time Frame
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You do not have to spend the money in your HSA within a specified period.
Tax-Deductible
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Contributions are tax-deducible. If you contribute to your plan with after-tax dollars, you may claim a deduction when you file your tax return.
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