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Do I interpret you to mean I can put the entire lump sum of $6550 at the start of the year? Do you have a reference for this? I would appreciate that. Thanks.
Well, I could Google one but I'm 100% positive this is how it works. You can put it all in on January 1st if you want or stagger the payments through the year or add money as needed to the plan--when you go to the dr and you know you are getting a bill. It's not like a flex spend plan where you have to pre-determine how much you will contribute to the plan. Feel free to look it up but I'm 100% positive you can put your full amount in Jan 1st if you want.
As for "compounding" check with the bank you are using to see what their rules are. Some banks allow investing at $1000 account balance others at $2000 or even $3000.
Well, I could Google one but I'm 100% positive this is how it works. You can put it all in on January 1st if you want or stagger the payments through the year or add money as needed to the plan--when you go to the dr and you know you are getting a bill. It's not like a flex spend plan where you have to pre-determine how much you will contribute to the plan. Feel free to look it up but I'm 100% positive you can put your full amount in Jan 1st if you want.
As for "compounding" check with the bank you are using to see what their rules are. Some banks allow investing at $1000 account balance others at $2000 or even $3000.
HSA bank allows zero balance in the cash account if you invest the money in td ameritrade in whatever you want (stocks, efts, bonds, mutual funds). Just have to pay $2.50 a month if cash account is less than $3k I believe.
Yes. I had an HSA when I worked. My job was terminated in September 2009. Even though I had made full contribution to HSA, I deducted eight-twelfths' that from my taxes. Obviously, I couldn't take the full deduction since I wasn't working the last four months of the year.
Plan was in effect on Jan. 1 of that year. See above.
After about 5 years of employment here in the US, my current employer is only offering HDHP with HSA for 2015.
I am on a work visa and if things go south at work, I will be forced to return to my home country. This being said, if I open an HSA account and contribute to it on a regular basis, what would happen to the money/account if I need to return to my home country permenantly? Is all of it lost? Do I have to bite the bullet and pay the penalty for taking the money out under this situation?
It's not a scenario I want to think of, but it there is a high possibility that the company will not be around in 2 years.
It's not all lost. You can write a check to yourself for the balance, and deal with the tax consequences when you file a US tax return for that year. Current penalty for nonmedical withdrawals is 20%, plus, of course, a regular income tax on that withdrawal.
I got my sister a "raise" using an HSA.... She works for a small employer. Very small. Their cost at the time was something like $1,400 for their portion of health insurance for their employees. So, I proposed a money making scheme for her.... And she took it to the owner.
Here's the deal... She told the owner, she didn't want him to spend $1,400 (plus more every year of course) for her insurance. Instead, she would buy her own insurance which was a tiny fraction of that. And, she would open an HSA. The owner would pay $200 for her policy (don't recall the exact number), she would pay the rest, and, the owner would max out her HSA each year. So, that came to something like $500 per month total that the owner would pay on her behalf.
So, the owner had a choice, keep spending $1,400 per month, or, spend $500 per month. Which would you choose? Obviously, there was no choice. So, she has always been healthy, and, she now has quite a large balance in her HSA, which is her money. If she quit today, it's still hers. And, the employer had $900 per month less in expenses. Quite a win win.
The idea was, her portion of the insurance is the same as it always was, she gets "free money" in her HSA (I call it a raise), and, the owner makes more money!
Small business insurance costs make this feasible, at least in her case.
I am confused. I had a HSA for 3 years while employed with different employer and we used our HSA card to pay for medicine. Now I just got a notice from IRS saying we owe $310 for use of our HSA??? Why? Can anyone help?
I am confused. I had a HSA for 3 years while employed with different employer and we used our HSA card to pay for medicine. Now I just got a notice from IRS saying we owe $310 for use of our HSA??? Why? Can anyone help?
Probably because you did not file Form 8889 when you filed your 1040.
Doesn't matter if you don't itemize. When you use your HSA, you must report the withdrawal to the IRS on Form 8889 so IRS can reconcile it with the 1099-SA form on the withdrawal filed by your HSA administrator.
If you got a notice from the IRS, you also were told how to dispute this charge, and provided a several page form on which to do so.
I'd start by sending back a Form 8889, with a letter telling IRS that you didn't know you needed to file Form 8889. Attach any and all receipts relating these charges, as well. Generally, Form 8889 doesn't require proof that withdrawals were medical - but, because this is an audit, they may want them. I'm betting IRS will just take your letter and the belated Form 8889 and call it a day.
Otherwise, file an Amended Tax Return for that year attaching Form 8889.
Not all bronze plans are tax qualified plans eligible for an HSA. There are some additional requirements under the law for how the deductible is met, etc. in order to qualify but several of the plans, bronze-platinum are HSA eligible.
Right - I can't find a HSA eligible plan in our area at all, in spite of paying very high deductibles. GRRRR!
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