Health Savings Accounts

Effective January 1, 2004 our government has made high deductible health care with a tax-favored savings account available. The savings account is never taxed if used to pay for qualified medical expenses and it earns good interest in the meantime. The money that is not used is for your client to keep. Money that is withdrawn for other than medical expenses will incur taxes plus a penalty of 10%. Money that is not withdrawn from the HSA may remain in the account and be used as income after age 65.
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