Tax-Advantaged Savings Account for Medical Costs

You should expect to hear more about a new Health Savings Account (HSA) that, for some consumers, could mean big tax breaks when used to save for certain medical costs, including doctor fees and long-term care insurance payments. But not everyone is eligible to open an HSA. Here's a quick summary.

You can set up an HSA at a bank or other U.S. financial institution that offers these accounts. According to IRS rules, your contributions are tax deductible and contributions made by your employer may be excluded from your gross income. The money can remain in the account for years and your earnings grow tax free. Also, there is no tax on the money you withdraw to pay for qualified medical expenses.

First Federal provides this information as a convenience to its customers. It is not intended to be professional advice.  First Federal encourages you to consult with a qualified advisor before making any decisions based on this information.

Source: FDIC Consumer News