Knaub & Company, P.C.

certified public accountants

PO Box 161030, Big Sky, MT 59716

Phone: 406-995-6040

Fax: 406-993-2772

Email: knaubco@3rivers.net

December 2017

Another Way to Use Your IRA

Article Image

The number of Health Savings Accounts (HSAs) is growing now that Americans better understand their value. HSA contributions are tax-deferred, potential earnings grow tax-free and distributions taken for qualified health care expenses are tax-free.


Now, IRA owners can grow their HSAs even faster by making a one-time rollover from their IRA to an HSA.


HSA and HDHP


You must have a high-deductible health plan (HDHP) to own an HSA. In 2018, HDHPs must have a minimum annual deductible of $1,350 for self-only coverage and $2,700 for family coverage. HDHP owners with self-only coverage may put into an HSA as much as $3,450; the limit for those with family coverage is $6,900. Add another $1,000 if you’re at least age 55 by year-end 2018.


Don’t Trip Up


You must be eligible to contribute to an HSA in order to make the rollover, and remain eligible for twelve months. If you’re on Medicare, for example, you’re not eligible to contribute to an HSA (although you may own one to which you previously contributed). Also, your contributions plus rollover can’t exceed the amount of your annual allowable contribution. That’s $7,900 for a 55-year-old with family coverage.


Two-way Benefit


An HSA benefits retirees because money can continue to grow without RMDs. You can also take HSA withdrawals for any reason after age 65 and owe just income tax on the amount.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox every month.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.