Health Savings Accounts are the most tax-efficient of all accounts, when the money is used for medical costs. You get a deduction on the way in, the account gets to grow tax-free, and the money comes out tax-free as well (again, assuming it’s used for qualified medical expenses). That’s the best tax treatment, at every step of the way.
This week, Christine Benz addressed the question of whether it’s possible to save too much in an HSA — and what to do about it, if you suspect that maybe you have done so.
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