Earlier in the week the RDTC Tax Help Blog posted the newest entry in its deduction of the week series. The new article explains the deduction available for health saving accounts (HSAs). Contributions to these plans are usually tax-deductible, and withdrawals are not taxable if the money is used for a qualifying medical expense.
Above the Line
The HSA deduction is an above the line deduction, meaning that you can itemize even if you claim the standard deduction.
Deduction Limits
The deduction you can claim for your HSA contributions are limited to a maximum dollar amount. In 2010, the limit is $3,050 for individual coverage, $6,150 for family coverage, and $1,000 for catch-up contributions.
IRS Qualifications
According to IRS Publication 969, to be eligible for the HSA deduction you must meet the following requirements:
- You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted under Other health coverage.
- You are not enrolled in Medicare.
- You cannot be claimed as a dependent on someone else's 2009 tax return.
- Claiming the Deduction