How will a Health Savings Account (HSA) benefit me?
- You have control over your funds
- Deposits are tax deductible
- The balance and interest earned is tax deferred when used to pay for qualified medical expenses (see IRS Publication 502)
- You decide what bills to pay from your HSA account
- Your funds do not expire
Who is eligible for an HSA?
Any Individual that:
- Is covered by a qualified High Deductible Health Insurance Plan (HDHP)
- Is not covered by other health insurances
- Is not eligible for Medicare
- Cannot be claimed as a dependent on someone else's tax return
HSA Contribution Rules
- Your annual HSA deposit cannot exceed your plan's deductible (except for catch-up contributions after age 55)
- The allowable contribution put into your HSA is a front page, line item deduction on your Federal Tax Return
- You must have a qualified HDHP to open or make contributions to an HSA
- The IRS's 2016 and 2017 maximum contribution limits are:
Taxable Year Individual Family 2016 $3,350 $6,750 2017 $3,400 $6,750 Participants age 55 and older are allowed an additional $1,000.00 per year as a catch up contribution.
HSA Distribution Rules
- See IRS Publication 502 for list of allowable expenditures
- Pay for allowable health expenditures using your HSA checks or debit card
- Keep your receipts for the end of year tax benefit
Grand Valley Bank is offering Health Savings Accounts with no set-up fees. Maintaining a minimum balance of $750.00 or an average balance of $1000.00 will waive the $5 monthly maintenance fee. We provide your checks and a monthly statement with your check images.
The account includes 5 free debits per month, then just $0.25 per additional debit. The deposits made to this account are reported to the IRS as a current tax year contribution unless otherwise requested at the time of the deposit. Each debit, check or withdrawal is reported to the IRS as a distribution for the current year. Debits should be for legitimate medical expenses and you must maintain documentation for those expenses.