8 smart moves to save on health care
Take advantage of tax incentives
If you don’t have health insurance or your coverage is through a high-deductible plan, contributing to a Health Savings Account (HSA) can help offset the cost of health care costs thanks to the tax benefits associated with the plans.
HSA contributions lower your taxable income and grow tax-free. Individuals can contribute up to $3,100 a year and families as much as $6,250 to cover allowable medical expenses such as copays, prescriptions, eyeglasses and dental exams.
For most taxpayers, an HSA is a better alternative than trying to deduct medical expenses on an itemized tax return, according to Kris Siolka, an enrolled agent and tax research specialist for the National Association of Tax Professionals.
Without an HSA, your annual medical expenses must be at least 7.5% of your adjusted gross income to be eligible for a tax deduction.
“Most people don’t have enough medical expenses to take the deduction,” Siolka says. “Anyone with a high-deductible health insurance plan who puts money into an HSA is eligible for the [tax] deduction.”