Saturday, June 21, 2008

IRS and HSA: Good News Update

[Welcome Kaiser Network readers!]
According to the NAABC, the Internal Revenue Service recently issued two positive items on HSAs:
First, many people aren't aware that you can fund your HSA (Health Savings Account) with money you have socked away in an IRA (regular and/or decaf, er, Roth). This is a one time deal, not something you can do on a regular basis. According to the Service, if you decide to make the transfer, it won't be subject to the normal 10% penalty s a "distribution." This method is typically used to "seed" the account at start-up.
Good deal.
And it gets better:
The Health Opportunity Patient Empowerment Act of 2006 clarified (among other things) how one calculates one's maximum HSA contribution in a given year. Basically, it affirms that the amount you can contribute isn't necessarily limited to your deductible. Even if your plan's deductible is less than the max, you can contribute the maximum.
And finally, for those who actually received their "Stimulus" checks (and you know who you are), even more good news:
If your check was deposited directly into your HSA, you can safely withdraw it. This would apply to folks who had their regular tax rebates deposited directly to their HSAs.
As always, check with your own tax advisor to see whether (and how) this would affect you.
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