Health Savings Account with high medical expenses
Barry Gold
compatible policy and an HSA, but my premiums are high (because of my
age) and I use up my deductible and out-of- pociet maximum every year,
and also have a lot of uncovered health expenses because some of my
doctors are out-of-network.
As a result, I can count on my medical expenses exceeding the 8%
threshold for deductibility every year.
ISTM to me that the Health Savings Account is actually not saving me
any money -- I put $3500 (pre-tax) into the HSA and then take it out
again (untaxed), but that $3500 is just $3500 less in deductions once
I exceed the deductibility threshold. But maybe the tax experts here
have a different view?
If it makes a difference, I live (and pay taxes in) California. And I
expect my combined state & federal "next dollar" tax rate to be about
20-25% for the next 3 years (until I start getting Social Security
at age 66).
--
Barry Gold, webmaster:
Conchord: http://www.conchord.org
Los Angeles Science Fantasy Society, Inc.: http://www.lasfsinc.org
--
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paulthomascpa
"Barry Gold" <bg...@nyx3.nyx.net> wrote
>I am on Cal-COBRA after working for a small employer. I have an HSA-
> compatible policy and an HSA, but my premiums are high (because of my
> age) and I use up my deductible and out-of- pociet maximum every year,
> and also have a lot of uncovered health expenses because some of my
> doctors are out-of-network.
>
> As a result, I can count on my medical expenses exceeding the 8%
> threshold for deductibility every year.
>
> ISTM to me that the Health Savings Account is actually not saving me
> any money -- I put $3500 (pre-tax) into the HSA and then take it out
> again (untaxed), but that $3500 is just $3500 less in deductions once
> I exceed the deductibility threshold. But maybe the tax experts here
> have a different view?
For one, the pre-tax lowers your AGI, so you can deduct more medical and
possibly other expenses that may be AGI sensitive.
I'd keep doing it.
--
Paul Thomas, CPA
www.paulthomascpa.com
Barry Margolin
"paulthomascpa" <paultho...@bellsouth.net> wrote:
> "Barry Gold" <bg...@nyx3.nyx.net> wrote
> >I am on Cal-COBRA after working for a small employer. I have an HSA-
> > compatible policy and an HSA, but my premiums are high (because of my
> > age) and I use up my deductible and out-of- pociet maximum every year,
> > and also have a lot of uncovered health expenses because some of my
> > doctors are out-of-network.
> >
> > As a result, I can count on my medical expenses exceeding the 8%
> > threshold for deductibility every year.
> >
> > ISTM to me that the Health Savings Account is actually not saving me
> > any money -- I put $3500 (pre-tax) into the HSA and then take it out
> > again (untaxed), but that $3500 is just $3500 less in deductions once
> > I exceed the deductibility threshold. But maybe the tax experts here
> > have a different view?
>
>
>
>
> For one, the pre-tax lowers your AGI, so you can deduct more medical and
> possibly other expenses that may be AGI sensitive.
>
> I'd keep doing it.
More specifically, you can deduct an additional $280 in out-of-pocket
expenses (8% of $3500), on top of the effective $3500 deduction from
this being pre-tax money.
--
Barry Margolin, bar...@alum.mit.edu
Arlington, MA
*** PLEASE don't copy me on replies, I'll read them in the group ***
removep...@yahoo.com
> �"paulthomascpa" <paulthomascp...@bellsouth.net> wrote:
> > "Barry Gold" <bg...@nyx3.nyx.net> wrote
> > >I am on Cal-COBRA after working for a small employer. �I have an HSA-
> > > compatible policy and an HSA, but my premiums are high (because of my
> > > age) and I use up my deductible and out-of- pociet maximum every year,
> > > and also have a lot of uncovered health expenses because some of my
> > > doctors are out-of-network.
>
> > > As a result, I can count on my medical expenses exceeding the 8%
> > > threshold for deductibility every year.
The threshold is 7.5%, or did it change to 8% in one of the recent tax
bills?
Also, under AMT, only deductions in excess of 10% are allowed.
> > > ISTM to me that the Health Savings Account is actually not saving me
> > > any money -- I put $3500 (pre-tax) into the HSA and then take it out
> > > again (untaxed), but that $3500 is just $3500 less in deductions once
> > > I exceed the deductibility threshold. �But maybe the tax experts here
> > > have a different view?
>
> > For one, the pre-tax lowers your AGI, so you can deduct more medical and
> > possibly other expenses that may be AGI sensitive.
Like stimulus checks, homebuyer's credit, deduction for misc expenses,
phaseout of itemized deduction, AMT exemption, etc.
> > I'd keep doing it.
>
> More specifically, you can deduct an additional $280 in out-of-pocket
> expenses (8% of $3500), on top of the effective $3500 deduction from
> this being pre-tax money.
That should be $262.50, assuming 7.5%.