The IRS has extended the deadline to contribute into your HSA for 2020 to May 17th. If you are planning on making a contribution, you now have extra time!
If you don’t know what an HSA is, it’s a tax-advantaged health savings account that can be used to pay for medical expenses. When you turn 65, you can use the funds in your HSA to pay for whatever you want!
An HSA works just like a normal savings account earning interest year after year. Some HSA’s allow you to invest the money, essentially acting just like a retirement account.
What are the advantages to an HSA?
You can deduct the amount that you contribute each year (within limits)
The money in an HSA grows tax free
You’re not taxed when you put money into the account
You’re not taxed when you use the money from your HSA to pay for qualified medical expenses
So what’s great about this extension, is that you now have an extra month to contribute money into your HSA for a deduction on your 2020 taxes!
We hope this helps, and if you have any questions, feel free to reach out to our team.