In This Time of Uncertainty, Health Savings Accounts (HSAs) Benefit Your Clients More Than Ever
Months after the initial outbreak, the COVID-19 pandemic continues to have a significant impact on millions of Americans. Job losses, hospitalizations, and fears of new outbreaks have left many Americans searching for a way to regain financial stability and peace of mind.
In these uncertain times, health savings accounts, or HSAs, have emerged as a powerful way to aid Americans who might be struggling with health or financial wellness challenges. Tax accountants and other advisors have a real opportunity to help clients rebuild a firm financial foundation by encouraging them to open and fund HSAs.
As a reminder, health savings accounts offer a triple tax advantage:
- Contributions to a health savings account can be taken as a payroll deduction or as an itemized deduction.
- Earnings or dividends from investments or interest from cash balances are tax-deferred.
- Withdrawals from a health savings account are tax-free as long as they are used for qualified medical expenses for the account holder, their spouse, and any tax dependents.