Carey Williams

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FSA vs. HSA Contributions

 

Highlights

 

Feature

 

Flex Spending Accounts

(FSA)

Health Savings Account

(HSA)

 

Contributions

 

PRE-TAX

Up to $2,600 (2017)

 

This amount should be determined based on expenses that you know will be incurred.

 

 

AFTER-TAX

Tax credits realized when filing tax returns.

 

The 2017 contribution limits are $3,400 (singles) and $6,750 (families).Upon reaching age 55, a catch-up feature allows additional contributions up to $1,000 each year.

 

 

Tax Free Withdrawals

 

Yes - when used to pay for eligible medical, dental & vision benefits

 

Yes - when used to pay for eligible medical, dental & vision benefits.   Otherwise, follows IRA withdrawal guidelines…10% penalty if prior to age 59 ½ PLUS treated as ordinary income.

 

 

The Use-It-Or

-Lose-It Rule

 

 

Applies

 

Any funds remaining in the participating employee's FSA account at the end of the plan year will be forfeited to your employer.  

 

 

 

Does NOT apply

 

Unused funds stay in your account and roll over every year.

 

 

Availability of Funds

 

First day of Plan Year

 

 

As your contributions are posted

 

Debit Card

 

Yes

 

Yes

 

 

Flexible Contributions

 

No – fixed amount every payroll

 

 

Yes – in amount and frequency

 

Interest Bearing

 

No

 

Yes – this is an IRA account allowing investments in Mutual Funds

 

 

Can you have both?

 

Yes – only if you have a “high deductible” health plan. But you cannot contribute to both in the same calendar year

 

 

Yes – only if you have a “high deductible” health plan. But you cannot contribute to both in the same calendar year



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