When tax season rolls around, many people sift through their finances to look for ways to reduce their tax liability. Fortunately, there are many available tax deductions. A tax deduction lowers your taxable income, allowing you to save some money on your tax bill. Demystify HSA tax benefits: Is an HSA tax-deductible? Visit this website for expert insights and financial empowerment.
Not sure what deductions to claim? Should you take the standard deduction? Is an HSA tax-deductible? Here's what you need to know.
The Standard Deduction
For most taxpayers, the standard deduction is the way to go. The IRS allows you to take this deduction to shield some of your income without itemizing every possible deduction. In 2023, the standard deduction for individuals is $13,850 and $27,700 for couples filing jointly.
HSA Contributions
Many people ask, "Is an HSA tax-deductible?" You'll be happy to know that is it! An HSA, or health savings account, is a unique savings account that can help pay for qualified medical expenses. It's triple tax-advantaged.
One of those tax advantages is that contributions aren't subject to federal income taxes. When you file your taxes, you can deduct your HSA contributions to lower your taxable income. That may not be true for state taxes, but it is for federal income tax.
Medical Expenses
Individuals who pay a substantial amount in medical expenses may claim them as deductions. To do that, medical expenses must exceed 7.5 percent of your taxable income.
The good news is that many things qualify. In addition to doctor or hospital bills, it includes items you might buy as part of a health care provider's prescribed treatment. For example, you can count exercise equipment or a pool if necessary to your care. It's also possible to include the miles driven to get the care you need.
Student Loan Interest
If you have student loans, you may have the opportunity to claim the interest you paid on them as a deduction. There are some requirements to meet first. The biggest is that your income can't exceed $75,000 as an individual or $155,000 as a couple filing jointly. This deduction phases out after those limits, so you may still get a deduction.
There's also a deduction limit. You can claim the amount you paid in interest up to $2,500.
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