Maximize Your HSA in 2016

02-16-2016Tax Information

With individual income tax season under way, I am seeing a number of clients with a high-deductible health insurance plan and a Health Savings Account (HSA).  Here are some ways to make the most of your money this year.
In 2016, those with individual high-deductible plans can deposit $3,350 into an HSA, while those with a family plan can contribute a maximum of $6,750. In either case, an extra $1,000 catch-up contribution is allowed for those age 55 or older.

  • Open and fund your HSA today.  High-deductible health plans can require policyholders to pay thousands out of pocket before insurance coverage kicks in. To soften the blow, the federal government allows those with qualified plans to open HSAs and pay their out-of-pocket expenses with tax-free money.  However, the tax savings only applies to expenses paid after the HSA was opened. You don’t need to fully fund it immediately -- or ever.  Pay into it what you can.
  • Your HSA can be an investment tool.  Some HSA accounts work as simple savings accounts and offer a minimal interest. Others let you invest money in mutual funds, just as you would in a 401(k) or IRA. 
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IRS E-file system temporarily shut down

02-04-2016Tax Information

The Internal Revenue Service reported it suffered a "hardware failure" on Wednesday afternoon, which left many of its tax processing systems unavailable Wednesday night, the agency announced in a statement.

The agency stopped accepting electronically filed tax returns because of the problem. The outage could affect refunds, but the agency said it doesn't anticipate "major disruptions."

The IRS is still assessing the scope of the outage and indicates nine out of 10 taxpayers will receive their refunds within 21 days.  The IRS.gov website remains available, but "Where's My Refund" and other services are not working.

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Trusts for Creative Spenders

02-01-2016Children & Students

Trusts can be quite useful for protecting children. However, for some children, the trust serves an additional function: It protects the principal from being rapidly spent by a child. These trusts have a specific name—they are called "spendthrift" trusts.

A spendthrift trust allows a parent to protect a certain amount of inheritance. If you have a circumstance like this, it may be appropriate to transfer inheritance outright to some of your children and the same amount of property into a spendthrift trust for the "creative spender" child.

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