What is the difference between a Health Savings Account (HSA) and a regular savings account through a bank?

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What is the difference between a Health Savings Account (HSA) and a regular savings account that I might set up through my bank?

I presume that withdrawals from an HSA can only be made for health expenses, but if I am conscientious about saving for health expenses, is there any advantage from a financial perspective for keeping my money in an HSA, rather than a bank savings account?

united-states hsa savings-account

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asked 2 hours ago

Thunderforge

6632714

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up vote
2
down vote

favorite

What is the difference between a Health Savings Account (HSA) and a regular savings account that I might set up through my bank?

I presume that withdrawals from an HSA can only be made for health expenses, but if I am conscientious about saving for health expenses, is there any advantage from a financial perspective for keeping my money in an HSA, rather than a bank savings account?

united-states hsa savings-account

share|improve this question

asked 2 hours ago

Thunderforge

6632714

add a comment | 

up vote
2
down vote

favorite

up vote
2
down vote

favorite

What is the difference between a Health Savings Account (HSA) and a regular savings account that I might set up through my bank?

I presume that withdrawals from an HSA can only be made for health expenses, but if I am conscientious about saving for health expenses, is there any advantage from a financial perspective for keeping my money in an HSA, rather than a bank savings account?

united-states hsa savings-account

share|improve this question

asked 2 hours ago

Thunderforge

6632714

What is the difference between a Health Savings Account (HSA) and a regular savings account that I might set up through my bank?

I presume that withdrawals from an HSA can only be made for health expenses, but if I am conscientious about saving for health expenses, is there any advantage from a financial perspective for keeping my money in an HSA, rather than a bank savings account?

united-states hsa savings-account

united-states hsa savings-account

share|improve this question

asked 2 hours ago

Thunderforge

6632714

share|improve this question

asked 2 hours ago

Thunderforge

6632714

share|improve this question

share|improve this question

asked 2 hours ago

Thunderforge

6632714

asked 2 hours ago

Thunderforge

6632714

asked 2 hours ago

Thunderforge

6632714

6632714

add a comment | 

add a comment | 

1 Answer
1

active

oldest

votes

up vote
4
down vote

Some high-level differences:

• Contributions to an HSA are tax-free


• Withdrawals for qualified medical expenses are tax-free


• Contributions are limited to $3,400 per year for an individual ($6,750 for a family)


• Employers can make contributions as well (they count toward the above limit)


• You must have a high-deductible health plan, no supplemental health insurance, and not enrolled in Medicare.

So if you qualify, the main benefit is a reduction in taxable income.

share|improve this answer

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

• 
  
  
  

  
  

  
  
  
  
  
  

  
  I assume that withdrawals are subject to tax too?
  – Thunderforge
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
  – Kevin
  2 hours ago
  
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
  – Kevin
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
  – Upper_Case
  2 hours ago
  

  
  
  
  

add a comment | 

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1 Answer
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active

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1 Answer
1

active

oldest

votes

active

oldest

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active

oldest

votes

up vote
4
down vote

Some high-level differences:

• Contributions to an HSA are tax-free


• Withdrawals for qualified medical expenses are tax-free


• Contributions are limited to $3,400 per year for an individual ($6,750 for a family)


• Employers can make contributions as well (they count toward the above limit)


• You must have a high-deductible health plan, no supplemental health insurance, and not enrolled in Medicare.

So if you qualify, the main benefit is a reduction in taxable income.

share|improve this answer

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

• 
  
  
  

  
  

  
  
  
  
  
  

  
  I assume that withdrawals are subject to tax too?
  – Thunderforge
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
  – Kevin
  2 hours ago
  
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
  – Kevin
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
  – Upper_Case
  2 hours ago
  

  
  
  
  

add a comment | 

up vote
4
down vote

Some high-level differences:

• Contributions to an HSA are tax-free


• Withdrawals for qualified medical expenses are tax-free


• Contributions are limited to $3,400 per year for an individual ($6,750 for a family)


• Employers can make contributions as well (they count toward the above limit)


• You must have a high-deductible health plan, no supplemental health insurance, and not enrolled in Medicare.

So if you qualify, the main benefit is a reduction in taxable income.

share|improve this answer

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

• 
  
  
  

  
  

  
  
  
  
  
  

  
  I assume that withdrawals are subject to tax too?
  – Thunderforge
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
  – Kevin
  2 hours ago
  
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
  – Kevin
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
  – Upper_Case
  2 hours ago
  

  
  
  
  

add a comment | 

up vote
4
down vote

up vote
4
down vote

Some high-level differences:

• Contributions to an HSA are tax-free


• Withdrawals for qualified medical expenses are tax-free


• Contributions are limited to $3,400 per year for an individual ($6,750 for a family)


• Employers can make contributions as well (they count toward the above limit)


• You must have a high-deductible health plan, no supplemental health insurance, and not enrolled in Medicare.

So if you qualify, the main benefit is a reduction in taxable income.

share|improve this answer

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

Some high-level differences:

• Contributions to an HSA are tax-free


• Withdrawals for qualified medical expenses are tax-free


• Contributions are limited to $3,400 per year for an individual ($6,750 for a family)


• Employers can make contributions as well (they count toward the above limit)


• You must have a high-deductible health plan, no supplemental health insurance, and not enrolled in Medicare.

So if you qualify, the main benefit is a reduction in taxable income.

share|improve this answer

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

share|improve this answer

share|improve this answer

edited 44 mins ago

edited 44 mins ago

edited 44 mins ago

answered 2 hours ago

D Stanley

48.3k7146156

answered 2 hours ago

D Stanley

48.3k7146156

answered 2 hours ago

D Stanley

48.3k7146156

48.3k7146156

• 
  
  
  

  
  

  
  
  
  
  
  

  
  I assume that withdrawals are subject to tax too?
  – Thunderforge
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
  – Kevin
  2 hours ago
  
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
  – Kevin
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
  – Upper_Case
  2 hours ago
  

  
  
  
  

add a comment | 

• 
  
  
  

  
  

  
  
  
  
  
  

  
  I assume that withdrawals are subject to tax too?
  – Thunderforge
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  2
  

  
  
  
  
  
  

  
  Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
  – Kevin
  2 hours ago
  
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
  – Kevin
  2 hours ago
  

  
  
  
  


• 
  
  
  

  
  

  
  
  
  
  
  

  
  @Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
  – Upper_Case
  2 hours ago
  

  
  
  
  

I assume that withdrawals are subject to tax too?
– Thunderforge
2 hours ago

I assume that withdrawals are subject to tax too?
– Thunderforge
2 hours ago

2

2

Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
– Kevin
2 hours ago

Contributions, growth, and withdrawals are all tax-free (except state income tax in CA, AL, and NJ, and some growth caveats in NH and TN).
– Kevin
2 hours ago

@Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
– Kevin
2 hours ago

@Thunderforge no, contributions, growth, and withdrawals are all tax-free (federally and in most states, see the link I posted above)
– Kevin
2 hours ago

@Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
– Upper_Case
2 hours ago

@Thunderforge Provided that the withdrawals are made for eligible medical expenses, there is no tax for doing so. But it is your responsibility to document the use of the withdrawal and assess any additional tax liability if it is not for an approved expense.
– Upper_Case
2 hours ago

add a comment | 

 

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