DECEMBER 17TH, 2008
By CPA SAM
Q. My company offers both an FSA and an HSA. I can’t see that there are any differences. Help!
A. Yet another in the long list of acronyms meant (I’m sure of this) to confuse employees. The differences begin with the names. The spelled out versions are “Flexible Spending Account” and “Health Savings Account.” There are two huge differences between these plans that I will discuss here to get you started.
I’ve never been a fan of the Flexible Spending Account (FSA) arrangement. You get to Read more »
NOVEMBER 19TH, 2008
By CPA SAM
Q. I am new to the Health Savings Account world, having elected this option this calendar year. I am confused about what I can have deducted and what my limits are within this year. I currently have deducted $4400 and my company has funded $268. I am over 50, are there any differences in terms of limits? What are the top limit amounts you can put into your HSA in 2008 and 2009?
A. It would be nice if all pre-tax investment and healthcare alternatives actually made sense. In the case of the HSA, it is important to remember that there are two parts to these types of plans. First, there is a high-deductible health plan. For 2008, your deductible must be at least Read more »
OCTOBER 15TH, 2008
By CPA SAM
Q. I am employed in the State of California and am curious to know what the tax limits and cutoffs are for Social Security and California SDI Payroll Taxes.
A. This question is a little more technical than I usually like to go. But there is common value and in this question and a possible tax planning opportunity available so here we go!
Social Security and Medicare are two taxes that should be withheld from every employee’s paycheck no matter who you work for. Many employees are incorrectly Read more »
APRIL 7TH, 2008
By CPA SAM
Q: Can I use my Health Savings Account (HSA) for over-the-counter (OTC) cough medicines?
A: This question gets to the heart of the coolest benefit from an HSA plan. The savings account portion is meant to cover the deductible expenses that you incur now that the deductible is much higher than a traditional indemnity plan. However, you are not limited to just insurance-covered items when using the savings account portion. There is a list issued by the provider of the HSA portion (bank, credit union, etc) of “Qualified Medical Expenses”. In general, these line up with the amounts that you can claim on Schedule A of your tax return each year. Over-the-counter medicines are covered in certain cases as well.
Here is the scenario: Let’s say you have contributed $750 to the savings account portion of the HSA plan. You have a debit card to Read more »
APRIL 3RD, 2008
By CPA SAM
Q. My employer just switched to a Health Savings Account plan for our insurance. How does this work? It seems so expensive.
A. The Health Savings Account is a fairly recent concept delivered by Congress. The attempt is to get away from the entitlement mentality to more of an ownership mentality. Under the standard insurance plan concept, you pay the first $500 or so in medical costs as your deductible and then get transferred to a $20 copayment each time you visit the doc. Some plans allow regular medical visits at $20 without any deductible. This type of thinking leads people to go to the doctor for every little Read more »
