Smart Last-Minute Tax Moves

Yes, we all hate filing taxes. And none of us like paying them very much, either!

But we all like saving money. Especially if we can do it at the expense of the IRS! 

So let’s get right to these actionable tax tips!

1.) Make Your Last-Minute HSA Contributions

Most health share plans are not HSA-compatible. But if you are a member of HSA SECURE, or have added the HSA MEC to your plan, and you meet certain other requirements, you ARE eligible to make pre-tax contributions to a health savings account.

And you should! HSAs are an incredibly powerful personal finance tool. So If you have an HSA-qualified plan, max your HSA contribution! You have until April 15th to make your contributions for tax year 2023.

Specifically, can contribute up to $3,850 for self-only plans, and up to $7,750 for family coverage. Those over 55 can contribute an additional $1,000 in “catch-up contributions.” 

Remember, HSAs offer triple tax advantages: 

• Contributions are tax-deductible. 
• The account grows tax-deferred, as long as the money stays in your HSA.
• Withdrawals for qualified medical expenses are tax-exempt.

2.) Sign Up For HSA MEC 

If you don’t have HSA SECURE, but you’re interested in contributing an HSA for 2024 and beyond, we now have an efficient, affordable way to do just that!  

It’s called HSA MEC, and it’s a way to become eligible to contribute to HSAs even if you have a health sharing plan and you’re not currently covered by an HDHP.   

It won’t provide an immediate tax benefit on April 15th. But you’ll be much better off come next April, when tax time comes around again. 

Contact your Personal Benefits Manager that sent you this newsletter to learn more!

3.) Top Off Last Year’s IRA and/or Roth IRA

Contributing to an IRA lowers your taxable income for the current year, while Roth IRAs offer tax-free growth in the future.

Both are terrific wealth accumulation vehicles for long-term investors. 

Make sure you take full advantage and contribute everything you can!

Keep in mind you have the rest of this year to contribute the max amount to your IRA accounts for tax year 2024. But to max out your IRA contributions for 2023, you must complete your deposits by April 15th!

4.) Claim All Your Deductions

Do you have unreimbursed medical expenses that are more than 7.5% of your Adjusted Gross Income? You can potentially deduct the excess amount from your income for 2023 by filing a Schedule A.

Additionally, do you have a Medical Reimbursement Arrangement (MRA), Flexible Spending Arrangement (FSA) or Health Reimbursement Arrangement through your employer? Use those for medical expenses as much as you can!

Each of these arrangements allow you to pay for medical expenses with pre-tax dollars. This can effectively save you from 20% to 40% compared to paying them out of your own pocket!

5.) Understand the Role of Health Sharing Plans

No, you can’t deduct contributions to health sharing plans like you can with traditional health insurance premiums.

But for many people, the monthly savings they get from dropping traditional health insurance products and switching to health sharing is more than worthwhile, even without a tax deduction!

If you don’t qualify for a large subsidy under the Affordable Care act, you’re in reasonably good health, and have no serious pre-existing conditions, these plans can be a smart way to manage your healthcare expenses!

Read More: How Much Money Can Health Sharing Save?

6.)  Plan for Next Year

Looking ahead, you might be wondering how you can save even more money on your taxes next year.

It’s a great time to reconnect with your Personal Benefits Manager to see if there are any changes you can make to your current plan.

Your PBM can look to see how much money you could save by switching health plans, see if you qualify for a special enrollment period, compare health sharing plans, or help you switch to an HSA-eligible plan for maximum tax savings and long-term retirement security! 

A Friendly Reminder

Disclaimer: I am not a tax professional, and so I can’t give individualized tax advice. This newsletter is for general informational purposes only.

For personalized tax advice that considers your unique situation, please consult with a professional tax advisor.

However, I hope you found some of these tips helpful as you make the best health choices for you and your family.

Here’s to making smart moves, not just at tax time, but all year round!

Click here to schedule an appointment, or call 800-913-0172 to get started.    

To your health and wealth,

Wiley P. Long, III
President - HSA for America

The HSA for America Maximize Your HSA Newsletter is published monthly and emailed to subscribers at no charge. Subscribe now to stay on top of the critical information you need to know about health insurance, healthshare plans and managing your finances to achieve financial security.