Author Topic: Is an HSA worth it w/o the deduction and 2 Rx?  (Read 4978 times)

kara

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Is an HSA worth it w/o the deduction and 2 Rx?
« on: November 02, 2015, 01:17:02 PM »
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« Last Edit: November 12, 2020, 07:50:13 PM by karaishere »

Malum Prohibitum

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #1 on: November 02, 2015, 01:58:01 PM »
You can still deduct it.  You need to read that answer more carefully.   It is saying that it is not something you can use to avoid SECA (Self Employed Contributions Act) taxes.  It is still a deduction on your income taxes.  An above the line deduction means it is deducted as part of calculating your AGI.  In other words, you do not need to itemize to take this deduction.
« Last Edit: November 02, 2015, 02:04:24 PM by Malum Prohibitum »

Spork

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #2 on: November 02, 2015, 02:29:06 PM »

And my reading (not a lawyer, not a tax accountant) is that the HSA deduction counts towards your MAGI.  In other words: a married couple gets $6,750 closer to the various magical FPL levels of the ACA subsidies by maxing out an HSA.

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #3 on: November 02, 2015, 05:54:40 PM »
You can still deduct it.  You need to read that answer more carefully.   It is saying that it is not something you can use to avoid SECA (Self Employed Contributions Act) taxes.  It is still a deduction on your income taxes.  An above the line deduction means it is deducted as part of calculating your AGI.  In other words, you do not need to itemize to take this deduction.

Thanks for clearing that up and for confirming my own assessment of HSA contribution deductibility!

N

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #4 on: November 02, 2015, 10:15:29 PM »
We have an HDHP family plan and an HSA. We bought it ourselves on the exchange.
We can still deduct our contributions on our taxes, but we still pay taxes on it as income first.
Still worth it- absolutely.

As someone said, it brings your MAGI down, which can be good for your income taxes, but also any subsidies you might qualify for on the exchanges are based on your MAGI.

When you do the application, it asks you what your last year MAGI was, and you can subtract what you intend to put in your HSA for the upcoming year. Does that make sense?

Ex. last year MAGI was 65K family maximum HSA contribution for 2016 is$ 6750. Use $58250 as estimated income for application. That can help if you qualify for subsidies.

another benefit, you can invest the HSA contributions, and reimburse yourself anytime in the future for medical expenses, or spend them as you go. 

IME, with our HSA, there is a separate deductible for prescriptions. We dont pay full price for the 3 my husband takes daily. He takes 3 heart medicines, and we paid about 300$ for all of our prescriptions this year, and that includes ear infections (2) and maybe another antibiotic or something. and they dont go towards our deductible.

Hope this helps.

johnny847

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #5 on: November 02, 2015, 11:10:26 PM »
I've got nothing to say with respect to the HSA, but since you mention you're buying health insurance from the marketplace as a self employed individual:
http://forum.mrmoneymustache.com/welcome-to-the-forum/some-tax-humor-for-you-guys-(and-of-actual-interest-to-some-self-employed)/


mandy_2002

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #6 on: November 02, 2015, 11:51:12 PM »
I know that worth my HDHP I get a negotiated rate for any prescriptions that I purchase. Are you certain that these would be your negotiated rates? My pharmacy benefits take into account the difference in effectiveness with some brand / generic choices. Yours may possibly do this as well?

Malum Prohibitum

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #7 on: November 03, 2015, 08:55:36 AM »
OMG. Can I face-punch myself? I missed out on the self-employment health insurance deduction for 2014 and now 2015 because I didn't purchase my insurance through the marketplace exchange.

We moved to Missouri in November 2013 and I didn't replace my Nebraska insurance to something local until May 2014 and I didn't use the exchange. Of course, until now, I was happy with my insurance so I let the plan continue into 2015 (and obviously didn't use the exchange again).

Well, shit. At least I can make the right choice going forward into 2016.
  I do not understand.  I purchase outside the exchange.  I am self employed.  I deduct the cost of premiums.  Would you please explain?

Malum Prohibitum

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #8 on: November 03, 2015, 09:16:05 AM »
I do not understand.  I purchase outside the exchange.  I am self employed.  I deduct the cost of premiums.  Would you please explain?

I just came back to edit my post. When I posted I thought that was a newer type of deduction (since ACA went into effect), but I've read more about it this morning and can see it's been around longer than that.

I've never taken that deduction and it seems I should have been since 2010. :(
  Then go back and amend your returns.  Time to cash in!

Malum Prohibitum

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #9 on: November 03, 2015, 09:18:32 AM »
Look here: https://www.irs.gov/uac/Newsroom/IRS-Offers-Tips-on-How-to-Amend-Your-Tax-Return

There are three year and two year timelines, so do not delay!

Get those multiple year refunds and throw them into your FI savings!

Malum Prohibitum

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Re: Is an HSA worth it w/o the deduction and 2 Rx?
« Reply #10 on: November 03, 2015, 09:39:54 AM »
now I must track down proof of my insurance payments from 2010-2013.
  I do not think you can go back to 2010, so this might not be as hard as you think.  You can only go back so far.  There are three year and two year timelines, meaning that is as far as you can go back.  This is bad news for you, as older years are lost.  The good news, however, is that you will not need to go track down evidence of 2010 payments.

Anyway, take a look at the IRS link, and it explains how far back you can go.