The Money Mustache Community

Learning, Sharing, and Teaching => Investor Alley => Topic started by: Mt Tahoe on March 14, 2014, 09:38:45 AM

Title: HSA Tax Question
Post by: Mt Tahoe on March 14, 2014, 09:38:45 AM
So I am employed, but pay my own insurance since employer had crappy plan, that they eventually dropped with ACA.

My question is, is there any difference in tax benefit between an employer putting the money in your account pre-tax, as opposed to me putting it into the account post-tax, then taking a deduction on my taxes at the end of the year? (besides of course having this money sit in uncle sams big piggy bank without gaining interest).
Title: Re: HSA Tax Question
Post by: jpo on March 14, 2014, 09:44:25 AM
I am not 100% sure, but I think if your employer contributes for you it lowers the amount you pay SS/Medicare on, not the case when you contribute your own post-tax funds.
Title: Re: HSA Tax Question
Post by: Cromacster on March 14, 2014, 09:52:14 AM
I am not 100% sure, but I think if your employer contributes for you it lowers the amount you pay SS/Medicare on, not the case when you contribute your own post-tax funds.

+1

For HSA you don't pay payroll taxes on it if it is deducted from your paycheck.  Where you only can deduct it from income if you do it yourself.
Title: Re: HSA Tax Question
Post by: Mt Tahoe on March 14, 2014, 10:47:50 AM
But does it make a big difference? I guess with SS, you technically get that money back? Medicaid I am not sure about.
Title: Re: HSA Tax Question
Post by: TheDude on March 14, 2014, 11:06:37 AM
Yes it makes a difference in general (unless your income is low) you will give more to ss than you take out.  On the other hand you will take more out of Medicare than you put in (most likely). If you can its absolutely worth an employer contribution. It saves you the 7.35 if you are employed and maybe 15.3 if your self employed (can anyone self employed verify this?). Also it will lower your income for unemployment.
Title: Re: HSA Tax Question
Post by: Mt Tahoe on March 14, 2014, 12:27:08 PM
I guess i can ask my employer if they can put my salary directly in HSA.