- Health Savings Account (HSA)
- An HSA is a tax-advantaged account established to pay for qualified medical expenses of an accountholder who is covered under a high-deductible health plan. With money from this account, you pay for healthcare expenses until your deductible is met. Any unused funds are yours to retain in your HSA and accumulate towards your future healthcare expenses or your retirement.
For complete details on HSAs you may wish to visit the U.S. Treasury at http://www.treas.gov/offices/public-affairs/hsa/
- What is your HDHP deductible amount?
- Your HDHP deductible amount is the amount you pay toward your own medical expenses, in a given year, before your insurance begins to cover any expenses.
- What was the first full month your HDHP was in effect?
- Select the first full month that your HDHP was in effect. If it was established in a prior year, choose "Prior to January of current year". Before 2007, contribution limits are calculated using the number of full months your HDHP was in effect. Beginning in 2007, contributions are not prorated by your plan's start date. However, if your HDHP effective date was after January 1st, and within twelve months of the end of the first year you no longer have an eligible HSA, you will have to report the difference between the prorated amount and the actual amount as income and pay an additional 10% penalty on that amount. Please note that the prorated amount is based on when your HDHP plan took effect, not when your HSA account was established.
- Will you be 55 or older this year?
- Your age is used to determine if you are eligible to contribute additional catch-up contributions to your HSA. If you are 55 or older and your HDHP is in effect, you are eligible to deposit catch-up contributions. For 2007, the additional amount is $800. This amount will increase to $900 in 2009 and $1000 thereafter. By checking the box you are indicating you are 55 or older this year and are still covered by an HDHP.
Catch-up contributions are not prorated. You can deposit the entire amount into your HSA as long are 55 or older at some point during the year.
- Will your spouse be 55 or older this year?
- Your spouse's age is used to determine what catch-up contribution amount they can deposit into their own HSA. By checking the box you are indicating your spouse is 55 or older this year and that they are eligible to contribute into an HSA. Please note, your spouse must have an HSA account established in their name and be eligible to make contributions into that account. For example, if your spouse is covered by your family HDHP and is over 55, but has enrolled in Medicare, they would be ineligible to make a catch-up contribution.
- What is your type of HDHP coverage?
- Choose the insurance coverage type for your HDHP. Your choices are "Family" or "Single".
- Did you change your coverage type during the year?
- If coverage type changed during the current year, check this box. Your annual contribution will be calculated using the number of full months you were covered under each coverage type. For example, if you had single coverage for 6 full months and family coverage 6 full months, your annual contribution amount would be a combination of the two limits of $4,250 for the year.
- What is the first full month your new coverage was in effect?
- Select the first full month your new HDHP coverage type became effective.
- What is your new HDHP deductible amount?
- The new deductible you must meet before the HDHP will begin to cover medical expenses.
- What is your new type of HDHP coverage?
- Choose the insurance coverage type for your new HDHP. Your choices are "Family" or "Single".
- What is your marginal income tax rate?
- Your marginal tax rate is used to calculate your potential tax savings. We assume that all contributions receive a tax deduction at the tax rate you enter here. Use the table below to assist you in determining your marginal income tax rate.
| Filing Status and Income Tax Rates 2007 |
Tax rate | Married filing jointly
or Qualified Widow(er) | Single | Head of household | Married filing separately |
| 10% |
$0 - 15,650 |
$0 - 7,825 |
$0 - $11,200 |
$0 - 7,825 |
| 15% |
$15,651- 63,700 |
$7,826- 31,850 |
$11,201- 42,650 |
$7,826- 31,850 |
| 25% |
$63,701- 128,500 |
$31,851- 77,100 |
$42,651- 110,100 |
$31,851- 64,250 |
| 28% |
$128,501- 195,850 |
$77,101- 160,850 |
$110,101- 178,350
|
$64,251- 97,925 |
| 33% |
$195,851- 349,700 |
$160,851- 349,700 |
$178,351- 349,700 |
$97,926- 174,850 |
| 35% |
over $349,700 |
over $349,700 |
over $349,700 |
over $174,850 |
Source: http://www.irs.gov/formspubs/article/0,,id=164272,00.html
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