The Great Tax Advantages of the HSA (Health Savings Account)

HSA accounts (Health Saving Accounts) are one of the best tax avoidance strategies available.

The accounts are funded through payroll withholding. They are provided by your employer if you have a high deductible Health Insurance plan.

The tax advantages are that the withheld money is free from both income, social security and Medicare taxes. Then any investment growth is tax free. Finally, the money used to pay medical expenses is tax free when withdrawn.

You will need to look at your individual situation to determine if an HSA is right for you. For wealthier taxpayers that don’t need to access the HSA on a yearly basis and can self-fund the yearly health plan deductible, holding an HSA until retirement could part of your financial plan.