Tap Posted February 4, 2011 Share Posted February 4, 2011 Why are HRA, HSA, FSAs allowed to contribute any $$ pre-tax but if someone wants to just take a medical deduction on their taxes, they can only use what is over 7.5% AGI? We unexpectedly ended up with $5,000 in medical expenses last year, which of course (since it was unexpected) I didn't have the $$ in my HSA to pay for them. We rarely go to the doc, but last year was an exception. I understand that the IRS has some odd rules, but I was wondering if there is some logic behind this? Quote Link to comment Share on other sites More sharing options...
Jean in Newcastle Posted February 4, 2011 Share Posted February 4, 2011 The money has to be funneled through the special account but I'm not sure why exactly other than it being separate and administered specifically for that purpose. Could you not put the money into the HSA account and then write check as soon as it was posted? I'm new to this HSA thing, but that's what I'm doing. . . Quote Link to comment Share on other sites More sharing options...
Tap Posted February 4, 2011 Author Share Posted February 4, 2011 The money has to be funneled through the special account but I'm not sure why exactly other than it being separate and administered specifically for that purpose. Could you not put the money into the HSA account and then write check as soon as it was posted? I'm new to this HSA thing, but that's what I'm doing. . . The HSA is preset by my employer. We have to designate how much we want taken out of our paycheck in October (the 2 week open enrollment time for benefits), for the following year. Once set, you can't change it. We had rollover from a few previous years of not using funds, so I didn't contribute.....and would have never expected to contribute $5000 anyways. :glare: Quote Link to comment Share on other sites More sharing options...
Jean in Newcastle Posted February 4, 2011 Share Posted February 4, 2011 The HSA is preset by my employer. We have to designate how much we want taken out of our paycheck in October (the 2 week open enrollment time for benefits), for the following year. Once set, you can't change it. We had rollover from a few previous years of not using funds, so I didn't contribute.....and would have never expected to contribute $5000 anyways. :glare: Ah. See my plan is to contribute (a bit each month) until we hit the maximum allowed. Then we'll use what we can and roll over the rest, then contribute the next year to hit the maximum. I only started this in October of last year but still hit my maximum in medical bills after that since I wasn't expecting 3 emergencies in those last 2 months! But ours isn't through an employer. Quote Link to comment Share on other sites More sharing options...
Tap Posted February 4, 2011 Author Share Posted February 4, 2011 Ah. See my plan is to contribute (a bit each month) until we hit the maximum allowed. Then we'll use what we can and roll over the rest, then contribute the next year to hit the maximum. I only started this in October of last year but still hit my maximum in medical bills after that since I wasn't expecting 3 emergencies in those last 2 months! But ours isn't through an employer. I am contemplating starting an independent one, outside of my employer. The one through my employer is nice, because it is attached to my medical plan so I don't have to do anything. No receipts, no forms...nothing. But, if I contribute to it and leave the employer before I use it up...I forfeit the money. That is why I haven't used it much. Too much risk for me to save a couple hundred dollars. Quote Link to comment Share on other sites More sharing options...
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