What are the tax benefits of an HSA?

HSAs typically allow for:
  • Pre-tax contributions, meaning they are deductible from your gross income when you file your federal taxes or you can have your contributions deducted from your paycheck prior to tax withholdings if your coverage is offered by your employer
  • Tax-free earnings and withdrawals for qualified expenses
  • Unused funds to accumulate year after year, tax-deferred – similar to an IRA
Check with your tax adviser to find out how an HSA works for your tax situation.