The Tax-Saving Power of HSA and FSA
Get the Most from Your HSA/FSA! Need help maximizing your tax savings?
If you have a Health Savings Account (HSA) or Flexible Spending Account (FSA), you already know these tax-advantaged accounts allow you to set aside pre-tax dollars to cover eligible medical expenses. But did you know that actually spending those HSA and FSA funds provides an additional layer of tax savings?
Spend Now to Save More
While HSA funds can be carried over and continue growing year after year for future expenses, there is no annual carryover for FSA balances. That’s why the IRS requires FSA holders to spend down their account balance by the end of the plan year or forfeit the remaining funds.
Rather than losing FSA money you’ve already set aside, it makes sense to use the funds right away on eligible healthcare costs. Sika makes it easy to use FSA (and HSA) funds when you check out across a large number of eligible retailers. See sikahealth.com/shop for more information.
Even routine health expenses that may seem minor can add up quickly. By paying for them tax-free with your FSA, you are saving a bundle compared to paying out-of-pocket with after-tax income.
The Same Goes for HSAs
While HSA funds can remain in the account year after year, there is no reason to hoard that money and pay a higher tax liability by not spending it. HSA funds roll over anyway, so use those dollars to cover current qualified medical expenses and save your taxable income for non-healthcare spending.
In general, the more you strategically spend on eligible healthcare costs, the more you can cut down on your total tax burden that year.
Take Advantage of the Tax Savings
Contrary to popular belief, it’s better to spend HSA and FSA balances than to let the money go untouched. Using those funds provides significant tax savings year after year.
Sika can help! Sika enables customers to purchase directly from a growing number of retailers with their HSA/FSA funds. Further, Sika is expanding the types of items that can be purchased with these pre-tax monies by connecting customers directly to healthcare providers to discuss their symptoms and treatment and obtain a Letter of Medical Necessity to purchase products and services related to their medical conditions with their HSA/FSA funds.