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FDX - Health Care Savings Account

Old 02-08-2008, 07:17 AM
  #1  
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Default FDX - Health Care Savings Account

I know there is another forum that addresses "money" issues, but this one is for guys that work at Fedex.

I am doing my taxes this year (last time, next time it goes to accountant). Has anyone had any experience when dealing with HCSA? Is this already deducted from our taxable income?? I am using turbo tax and it mentions a 1099-SA form (which I haven't received, and am not sure if/when I will). There is an amount in block 14 (other) that has HCSA and the amount. Anyone else do their own taxes? Any help how to work this would be greatly appreciated...

On another subject, I used Pro-diem on advice from APC'ers. It cost me 50 bucks and I got a 5K deduction. I do fly about half my trips overseas, not sure about domestic only. Thanks for that tip guys!
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Old 02-08-2008, 07:59 AM
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If you look at your W-2 I think you will find that the HCSA has already been reported as non taxable income. But consult an accountant for good advice.

Don't forget to add that $50 into the cost of preparing your taxes.
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Old 02-09-2008, 05:28 AM
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Whatever amount you put into the hcsa, it lowers your "taxable" income (like the 401).
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Old 02-12-2008, 09:43 AM
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On a slightly seperate note, DON'T USE AN HSA!!! OMG, that is the worst scam you will find. You are better off setting up a high interest savings account and making direct deposits into it. Here's why:

When you put money into the HSA you don't pay taxes, but you don't earn interest (in most cases) either. That means your money is just dead in the water. Now, when you contribute to an HSA you lock that money into one use and one use only. It can not be rolled over into any other type of account.

If you just create a high interest savings account and make deposits into that account the same way you would into an HSA, you'll have access to your money for any reason, you'll be making money and if you do use the money for medical expenses it is tax deductible. You will get the taxes back at the end of the year, which you can put back into your savings account and have the security you get with an HSA with the flexibility of having a normal savings account.

This is what I do and I haven't touched my savings account for years and I'm making 5.75% interest. I don't think that rate is available now, though. I found several at 4.25%. When I get laid off again (because this is aviation and we all get laid off several times in our career) my version of the HSA is available for use to pay bills with out penalty.

But, that is just my opinion.
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Old 02-12-2008, 09:56 AM
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Nothing wrong with opinions. I use my HCSA but always undershoot how much I think I'll need. I am lucky enough to by braces for the 7th grader this year. That $2K co pay will come out of the hcsa; saving me roughly $400 in taxes. That would take plenty of money and time to make up at 4.25%.
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Old 02-12-2008, 10:03 AM
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You can deduct only the amount of your medical and dental expenses that is more than 7.5% of your adjusted gross income (Form 1040, line 38). A HCSA reduces your taxable income by the amount you decide to fund it, and you do not have to fund it entirely at the outset of the year (you can make 12 monthly payments totaling the amount you specify for the HCSA for the tax year).

A HCSA and taxable interest bearing savings account do not compare apples to apples.
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Old 02-12-2008, 10:06 AM
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I think it can be a good deal if you don't overestimate your medical needs. Whatever you don't spend is lost, and that certainly makes up for any tax advantages.

Wildcat, I am not sure how your HSA is implemented, but at FDX we split our payments by 12. For example, if you decide you want a $3,000 HSA, they send you a debit card that has $3,000 available to spend on medical needs. You pay $250/month. In FDXLAG's case, he could spend 3k on braces in January, yet pay off the balance interest free. I am not sure how you would earn any real amount interest on this money, and the tax advantages would most likely outweigh any interest earned. I think the key point is don't overestimate your needs. It becomes a very bad deal then....
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Old 02-12-2008, 10:11 AM
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wildcat, great idea for someone who has not touched that money in years. Sounds like you have created a savings account for emergency purposes. If you don't need the money for medical expenses - there is no reason to create an HCSA.

With the HCSA you have the full amount (which you determine each year) available on Jan 1st but, the payments are spread out over the entire year. Great if you have some big expenses planned early in the year. Also, medical expenses are only tax deductible once you reach a certain threshold (I think it something like 7% of your adjusted gross income). The money put into the HCSA is pretax and reduces your taxable income. The only downside to the HCSA is if you don't spend all you put into it for a year, it disappears

To each his own - but for many the HCSA actually saves more in taxes than they would ever earn in interest (unless you can find somewhere that is paying above 15% )
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Old 02-12-2008, 10:13 AM
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The rest of you type too fast
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Old 02-12-2008, 10:25 AM
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Originally Posted by wildcat1 View Post
On a slightly seperate note, DON'T USE AN HSA!!! OMG, that is the worst scam you will find. You are better off setting up a high interest savings account and making direct deposits into it. Here's why:

When you put money into the HSA you don't pay taxes, but you don't earn interest (in most cases) either. That means your money is just dead in the water. Now, when you contribute to an HSA you lock that money into one use and one use only. It can not be rolled over into any other type of account.

If you just create a high interest savings account and make deposits into that account the same way you would into an HSA, you'll have access to your money for any reason, you'll be making money and if you do use the money for medical expenses it is tax deductible. You will get the taxes back at the end of the year, which you can put back into your savings account and have the security you get with an HSA with the flexibility of having a normal savings account.

This is what I do and I haven't touched my savings account for years and I'm making 5.75% interest. I don't think that rate is available now, though. I found several at 4.25%. When I get laid off again (because this is aviation and we all get laid off several times in our career) my version of the HSA is available for use to pay bills with out penalty.

But, that is just my opinion.
A scam?

Well, my opinion is:

An HCSA is a no brainer. NO taxes trumps a high interest savings account probably about 100% of the time. Just go over your previous year's expenses to come up with a fairly accurate estimate, for your yearly contribution.

Sure, you can just deduct medical expenses on your tax return. That is, anything exceeding 7.5% of your AGI. If you've reached that point, you've most likely gone over the $5650/family HSA limit, anyway.($3000 @ FDX)

Of course, if you're single with no kids, and never go to a doctor, dentist, chiropractor, or need glasses, aspirin, bandaids or cough syrup...You might not be able to take advantage of it. But, if your anyone else, it's the opposite of a scam.

And, for our senior(age) pilots...It can be used for wheelchairs, hearing aids, support hose and learning disabilities. The last of which, may come in handy for that glass cockpit transition.
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