![]() ![]() You won't get to deduct from your taxes what your employer contributes, but you will be getting free money that can grow over time if it's invested.īy investing at least a portion of your HSA funds, you can potentially build up your medical spending nest egg, which can be especially valuable later in life. 1 Think of it like a 401(k) match for your health. Your employer may make contributions to your HSAĪlmost 80% of employers help employees pay for medical expenses through contributions to their HSAs. Only contributions made with payroll deduction avoid Medicare and Social Security taxes. But it's important to keep in mind, contributing via payroll deductions will lead to the most tax savings. That helps increase the amount of money you have for medical spending. ![]() HSA tax deductions can have powerful benefits: For instance, someone in the 22% federal income tax bracket could potentially save nearly 30% in taxes (federal income + FICA + potentially state income) on every dollar contributed to the HSA. If you fund your HSA with after-tax dollars instead, you may be able to take a tax deduction on your personal taxes when you file. HSA contributions are typically made with pre-tax income from your paychecks, similar to the way 401(k) contributions are set up. You can deduct your contributions from your taxes Here's more about what you need to know about the financial advantages of HSAs.
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