6 min
Ep #064: The Triple Tax-Free Benefits of the HSA (Health Savings Account) Business Exit Success
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- Entrepreneurship
In this timely episode, as we approach the end of the year and step into open enrollment season, we unpack the advantages of Health Savings Accounts (HSAs) for both business owners and employees. HSAs offer triple tax-free benefits, including pre-tax contributions, tax-free growth, and tax-free distributions for qualified medical expenses, making them a potent tool for long-term financial planning.
Eligibility for HSAs requires enrollment in a high-deductible health plan, with specific deductible thresholds and contribution limits for 2024 outlined for individual and family plans. While not suitable for everyone due to the high deductible requirement, HSAs present significant tax savings and investment growth opportunities for those who participate.
This episode details how contributions through payroll can maximize benefits by also avoiding employment taxes. For those without access to an employer-sponsored HSA, opening an individual HSA account still offers tax-deductible contributions and the same growth and distribution advantages.
Listeners will learn about the comprehensive list of qualified medical expenses covered by HSAs, the distribution guidelines to avoid taxes and penalties, and the unique benefits for individuals over 65, including the absence of Required Minimum Distributions (RMDs) and the ability to use funds for non-medical expenses without penalties.
The episode also compares HSAs to Flexible Spending Accounts (FSAs), highlighting the "no use-it-or-lose-it" feature of HSAs, which allows funds to roll over and accumulate year after year. This makes HSAs an excellent vehicle for funding future medical bills and supplementing retirement income.
Resources:
Qualified Medical Expenses One Pager
Medical & Dental Expenses: IRS Publication 502
HSAs & Other Health Plans: IRS Publication 969
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We help business owners:
→ Understand the complexity of navigating a business transition
→ Assess their level of preparedness from a financial, tax, and legal perspective
→ Plan for the next chapter of their life
👉 Get Your Free Readiness Assessment!
-----
WANT MORE BUSINESS PLANNING TIPS?
Subscribe to the Business Exit Success Newsletter.
As a thank you, you'll receive a copy of The Freedom Point: A Financial Planning Guide for Business Owners.
Click here to subscribe and grab your free guide.
In this timely episode, as we approach the end of the year and step into open enrollment season, we unpack the advantages of Health Savings Accounts (HSAs) for both business owners and employees. HSAs offer triple tax-free benefits, including pre-tax contributions, tax-free growth, and tax-free distributions for qualified medical expenses, making them a potent tool for long-term financial planning.
Eligibility for HSAs requires enrollment in a high-deductible health plan, with specific deductible thresholds and contribution limits for 2024 outlined for individual and family plans. While not suitable for everyone due to the high deductible requirement, HSAs present significant tax savings and investment growth opportunities for those who participate.
This episode details how contributions through payroll can maximize benefits by also avoiding employment taxes. For those without access to an employer-sponsored HSA, opening an individual HSA account still offers tax-deductible contributions and the same growth and distribution advantages.
Listeners will learn about the comprehensive list of qualified medical expenses covered by HSAs, the distribution guidelines to avoid taxes and penalties, and the unique benefits for individuals over 65, including the absence of Required Minimum Distributions (RMDs) and the ability to use funds for non-medical expenses without penalties.
The episode also compares HSAs to Flexible Spending Accounts (FSAs), highlighting the "no use-it-or-lose-it" feature of HSAs, which allows funds to roll over and accumulate year after year. This makes HSAs an excellent vehicle for funding future medical bills and supplementing retirement income.
Resources:
Qualified Medical Expenses One Pager
Medical & Dental Expenses: IRS Publication 502
HSAs & Other Health Plans: IRS Publication 969
-----
We help business owners:
→ Understand the complexity of navigating a business transition
→ Assess their level of preparedness from a financial, tax, and legal perspective
→ Plan for the next chapter of their life
👉 Get Your Free Readiness Assessment!
-----
WANT MORE BUSINESS PLANNING TIPS?
Subscribe to the Business Exit Success Newsletter.
As a thank you, you'll receive a copy of The Freedom Point: A Financial Planning Guide for Business Owners.
Click here to subscribe and grab your free guide.
6 min