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Posted by MyVeryOwnSelf on August 22, 2008, 5:45 pm
>> ... I tend to look at an HSA as another tax-advantaged
>> savings vehicle, so I would think that spending money out of pocket
>> and keeping the HSA intact would be beneficial.
The reason there's such a wide discussion is that different people look at
an HSA in different ways.
Personally, I think of it as a way to get around the 7.5% threshold for
deducting medical expenses on Schedule A every year. With an HSA, I (in
effect) get to deduct medical expenses from the first dollar every year.
Now if only California would conform with the federal policy!
Editorial: If Congress had wanted to do things right, it would not have
invented HSAs. Instead, they would have eliminated the 7.5% threshold for
anybody having a high-deductible health plan. That would have accomplished
the same objectives with far less bureaucratic rigmarole (IMO).
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Posted by on August 23, 2008, 6:39 pm
> Editorial: If Congress had wanted to do things right, it would not have
> invented HSAs. Instead, they would have eliminated the 7.5% threshold for
> anybody having a high-deductible health plan. That would have accomplished
> the same objectives with far less bureaucratic rigmarole (IMO).
Not to argue Congressional intent, but had they done it
that way, you'd be deducting those expenses on your
federal income taxes, but your employer and you would
still both be paying social-security taxes on it. Your
employer wouldn't have any incentive to contribute,
and you'd have less cash to use for it, too (unless you
are one of the top few percent of earners). Moreover,
the accrual/growth features - it's a tax-free/tax-deferred
account - add huge value if you don't use up all you've
saved in the early years. Healthy young folks with low
medical expenses can end up with huge balances later on
to use for future (likely higher) medical expenses and
if they never use them for medical expenses, eventually
the money can come out of it like an IRA - pay taxes
but no penalty after 65. (and, again, never have paid
any SS taxes on it in the first place).
HSAs, for those with low current medical expenses, are
a huge win.
--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting
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Posted by rick++ on August 24, 2008, 2:41 pm
> Editorial: If Congress had wanted to do things right, it would not have
> invented HSAs. Instead, they would have eliminated the 7.5% threshold for
> anybody having a high-deductible health plan. That would have accomplished
> the same objectives with far less bureaucratic rigmarole (IMO).
Or a single, fairly high ceiling, generalized "tax-incentive-savings
plan".
Now there are several different kinds of retirement savings plans,
college savings plans, and health plans. I must have about ten of
these myslef and big families have even more. Lots of paperwork for
both taxpayers, companies and the government.
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Posted by rick++ on August 20, 2008, 5:05 pm
The general tax rule is "accelerate deductions,
defer income" - which appplies to a concept of
money that depreciates with time. When applied
to HSAs, that suggests spending tax-deducted
HSA dollars when you need to.
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Posted by Gil Faver on August 20, 2008, 8:35 pm
> The general tax rule is "accelerate deductions,
> defer income" - which appplies to a concept of
> money that depreciates with time. When applied
> to HSAs, that suggests spending tax-deducted
> HSA dollars when you need to.
both money in an HSA and money not in an HSA "depreciates with time".
Doesn't the money in an HSA depreciate at a lower rate than money not in an
HSA?
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
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guidelines include a request for brevity and another for trimming posts to
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MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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