Money and Health Go Hand in Hand

Start a Health Savings Account

If your plan has a high-deductible policy, open a Health Savings Account (HSA) and contribute to it regularly (automatic deposits from your main bank account make for one less thing to remember). Your HSA acts as a great buffer for any out-of-pocket health expenses

If you’re working, talk to your company’s benefits representative about tax-deferred and flexible spending healthcare accounts, which you can contribute to regularly with pre-taxed income. This can be a great buffer for any unforeseen medical expenses. Money deposited into an employee's FSA is not subject to payroll taxes, which can make for a substantial payroll tax savings. However, some of these accounts are “use it or lose it,” so it’s important that you set up an investment plan that most closely fits your needs.

Medical Tax Deductions

Keep a record of your medical expenses. These may be deductible. The IRS makes the stipulation: “You may deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income.” (See www.irs.gov Publication 502.)

Keep a record of mileage for medical reasons, and any health items you’ve needed to purchase. These may be deductible. Organize your medical bills into a folder by the date you received the medical treatment (“Date of Service”), so they’re easier to reference later.

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