With a Health Savings Account (HSA), you can contribute up to $2,900 for 2008 ($5,800 for family coverage) in conjunction with a high-deductible health insurance plan. Distributions are tax-free to the extent they are used for medical expenses.
Strategy: Open an HSA before Jan. 1. A new IRS ruling says you can still contribute the maximum amount allowed for the year. (IRS Notice 2008-52)
However, if you don’t remain HSA-eligible in 2009, you must pay tax plus a 10% penalty on an amount equal to the part of the HSA contribution for 2008.
Tip: If you’re age 55 or older, you can contribute an extra $900 for 2008.
- Small Business Tax Deduction Strategies No matches