Health Savings Account (HSA) is the best saving vehicle for health-related spending with triple-play tax benefits: Save money on a pre-tax basis, earn interest on the funds, and withdraw the money tax-free. To take advantage of HSA you have to understand more about it.
Forbes contributor Nancy Anderson shows you how best to withdraw funds from HSA account for medical expenses. There are two main ways to withdraw:
- Using HSA debit card that comes with your account
- Paying out of pocket then get reimbursement back from HSA account
Make sure you save all your receipts for tax report later on. The main advantage of a Health Savings Account is tax savings, and if you have the savings capacity and want to max out the tax savings, you want to fund the HSA to the max. For 2016, the annual limit is $3,350 for individual coverage and $6,750 for family coverage.