deduction depend on a few factors, such as the deductible on your health insurance plan.
Who is best suited for an HSA?
Clearly, those who would prefer, or already have a high-deductible on their health insurance policy are poised to get the most benefit from this new program. For the self-employed who don’t have any insurance policy, a low-cost, high-deductible plan that qualifies for an HSA is a good starting point. Even older adults may find that this plan is of benefit. We have actually seen cases where folks with a number of medical conditions are better off with an HSA because their insurance premiums are so high that the dollar savings is substantial going to an HDHP.
How much can you contribute to an HSA on an annual basis? Can you invest in mutual funds, stocks, bonds, etc., with the money in the HSA?
There are limits to setting aside for an HSA: $5,450 for a family and $2,700 for an individual. Also, there are catch-up provisions for people over 55. As long as the account is being handled by an IRS- approved account custodian, you may invest in all of those you wish.
Who can be claimed as a dependent for an HSA?
If you are talking about the dependent status of the taxpayer’s child under age 19 (or a child who is a full-time student under age 24), there is no limit on the amount of income that the child can earn— they can still be claimed as a dependent, but the child cannot provide more than half of his or her own support. With other individuals, a dependent cannot make more than $3,100. Whether someone is a dependent or not is somewhat involved and discussed in IRS Publication 501.