Lesson: Health Savings Account

In this lesson, Nick Palazzolo, CPA, demystifies Health Savings Accounts (HSAs) by explaining how they are a tax-advantaged way to save for medical expenses when paired with a high deductible health plan. He shares both his personal insights and professional experience to offer a relatable understanding of the benefits and limitations of HSAs. Nick outlines how contributions work, the tax benefits they offer, such as tax deductible contributions, tax deferred growth, and tax-free withdrawals for qualified medical expenses. He contrasts HSAs with Flexible Spending Accounts (FSAs), emphasizing the 'use it or lose it' rule and how HSAs funds roll over indefinitely. Real-life examples are used to illustrate the financial impacts of contributing to an HSA, including potential tax savings and the way gains on investments within the HSA remain untaxed.