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Entries in Health Savings Account (2)

Friday
Mar252011

Tax Tip: Taking Advantage of Health Savings Accounts

Creatas Images/Thinkstock(NEW YORK) -- It's been around for about a decade now, but many people still don't understand how a health savings account works.

As one person decribes it, think of it as an IRA for your health care expenses, with triple tax savings.

"You put your money into the health savings account tax free, and then it grows tax free.  The interest you earn on it is tax free, and when you take money out for qualified medical expenses, that's tax free as well," says Kathy Pickering with H&R Block.

Pickering says health savings accounts can no longer be used for over-the-counter medication, but many doctors will write prescriptions for those drugs.  And unlike a flexible savings account, the health savings account money rolls over year to year.

"If you can hold on to your health savings account, say as you lose your job, if you move to a new job, you can still use those funds and then if you can hold onto it until retirement.  That's just additional money that you can use later when you need it," she says.

Copyright 2011 ABC News Radio

Tuesday
Feb222011

Tax Tip: Taking Advantage of Health Savings Accounts

Photo Courtesy - Getty Images(NEW YORK) -- It's been around for about a decade now, but many people still don't understand how a health savings account works.

As one person decribes it, think of it as an IRA for your health care expenses, with triple tax savings.

"You put your money into the health savings account tax free, and then it grows tax free.  The interest you earn on it is tax free, and when you take money out for qualified medical expenses, that's tax free as well," says Kathy Pickering with H&R Block.

Pickering says health savings accounts can no longer be used for over-the-counter medication, but many doctors will write prescriptions for those drugs.  And unlike a flexible savings account, the health savings account money rolls over year to year.

"If you can hold on to your health savings account, say as you lose your job, if you move to a new job, you can still use those funds and then if you can hold onto it until retirement.  That's just additional money that you can use later when you need it," she says.

Copyright 2011 ABC News Radio







ABC News Radio