Question

as a participant in a high deductible health insurance plan, Pete also qualifies for a health saving account. pete sets up the account and contribute $3,000 to the account in the current year. he also take a distribution from the account of $2,000 to pay for dental expense:

what is the health savings account deduction

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Answer 1

Health savings account (HSA) is privileged scheme created for individuals already covered under high-deductible health plans.

For tax year 2019, the contribution limit to HSA is $ 3,500 for self-coverage. Individuals with family can make contribution upto $ 7,000. These are 100% tax deductible.

Pete has made $ 3000 contribution within the limit and hence deduction is allowed.

Further the account holder can withdraw amount from HSA only for qualified expenses one of which include dental expenses. The dental expenses of $ 2,000 qualifies for expense under HSA.

So, the health savings account deduction is $ 3,000/.