SOMA Living November 2023

FINANCIAL FOCUS

UNDERSTANDING HSAS AND FSAS

Managing healthcare costs can be challenging. Are you utilizing available resources to the fullest? Let’s explore Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). An HSA is a personal savings account for healthcare expenses. If you qualify for a high-deductible health plan, you may contribute to an HSA. Contributions and earnings are untaxed when used for qualified healthcare costs like deductibles, copayments, and coinsurance. HSAs do not have a “use it or lose it” provision, allowing you to retain funds until retirement for qualified expenses not covered by Medicare or Medigap. In 2023, the maximum contribution is $3,850 for individuals ($4,850 for those 55 or older) and $7,750 for family coverage. Employers often offer FSAs, which function differently. FSAs are funded with pre-tax dollars, reducing taxable income. In 2023, the maximum contribution to an FSA is $3,050. Employers may also contribute. To receive reimbursement, submit claims with supporting documentation for medical expenses not covered by your plan. Accurately estimating annual medical expenses is crucial for FSAs, as unspent funds typically expire at the end of the plan year. Up to $610 from 2023 can be carried over to 2024. Note that you cannot contribute to both an HSA and a traditional FSA in the same year. However, if you have an HSA, you may qualify for a Limited Purpose Flexible Spending Account (LPFSA) covering dental and vision expenses. Confirm availability with your plan. Effectively managing healthcare expenses is vital for your overall financial strategy. Consider maximizing benefits by utilizing HSAs or FSAs.

THE PET SHOP FOR PETS

www.baxterssupply.com contact@baxterssupply.com • Instagram @baxtersupply 1876 Springfield Ave, Maplewood

Gary T. Jones 973.821.4900 • g.jones@EdwardJones.com

With over 25 years of experience, I work with individuals and businesses to help you achieve your financial goals. As a longtime resident of SOMA, I am proud to serve the local community. To learn more about the content of this article or schedule an appointment to talk about your goals, please contact me in my Maplewood office.

NOVEMBER 2023 | SOMA LIVING 19

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