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Tax implications of medical saving and spending accounts
Source:
csmonitor.com
- Mar 21, 2017
March 19, 2017 —Medical expenses can take a big bite out of your wallet. A couple of special accounts, however, are good remedies for both your doctor and tax bills.
A medical flexible spending arrangement is a workplace account you contribute to as a deduction from your salary that reduces your taxable income. You then can use the funds to pay for certain medical costs that come out of your own pocket, such as insurance copays, prescriptions and other items needed to meet your health policy’s deductible.
A health savings account is a savings plan to which you make contributions you can then use to pay a variety of medical costs. Only people with a qualifying high-deductible health plan are eligible. Contributions are tax-deductible, and the account’s earnings if invested are tax-free, as are withdrawals for eligible medical expenses.
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Category: General Business
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