HSA, which stands for Health Savings Account, is a financial tool designed to assist with saving money for medical expenses that are not covered by health insurance plans. HSAs are exclusively available to individuals with a high-deductible health plan (HDHP), a health insurance plan with a higher deductible compared to traditional plans. Contributions to your HSA are tax-deductible, meaning they lower your taxable income. The money in your HSA grows tax-free, and qualified withdrawals for medical expenses are also tax-free.

There are limits to how much an individual can contribute to their HSA each year, and there are rules about how the funds are spent. For 2023, the contribution limit is $3,650 for single coverage and $7,300 for family coverage.If you're 55 or older, you can make an additional catch-up contribution of $1,000.

Funds in HSA can continue to grow tax-free. An HSA can be a valuable tool for individuals and families looking to save on medical expenses and reduce their tax burden.

The time frame for reporting HSA expenses depends on the specific HSA plan, but generally, there is no deadline for reporting expenses. You may be subject to taxes and penalties if you withdraw funds for nonqualified expenses. After age 65, the 20% penalty no longer applies. To report an HSA fee, you will generally need to provide documentation, such as a receipt or invoice, showing the date of the fee, the amount paid, and the nature of the payment.The IRS defines qualified expenses. You should read Publication 502 for the complete list.

From the date of the HSA account holder's death, the HSA continues to serve as a tax-free account for medical expenses if the beneficiary is a spouse. However, non-spousal beneficiaries must pay taxes on the entire balance in the distributed HSA. They must include the HSA balance in their taxable income for the year the account owner died.

If you have an HSA and will soon be eligible for Medicare, you need to stop contributing to your HSA at least six months before you enroll in Medicare if there is a delay in enrolling in Medicare. That's because when you enroll in Medicare Part A, you'll get coverage retroactively for up to six months, no further than the original month you were eligible for (at age 65). You could be fined if you don't stop your HSA contributions at least six months before enrolling in Medicare.

However, you can continue withdrawing money from your HSA while enrolled in Medicare to help pay for medical expenses such as deductibles, premiums, copays, and coinsurance. If you use the account for qualified medical expenses, its funds will continue to be tax-free.

Suppose you delay Medicare enrollment because you are still working and want to continue contributing to your HSA. In that case, you must also wait to receive your Social Security retirement benefits. This is because most individuals who receive Social Security benefits are automatically enrolled in Medicare Part A when they become eligible for Medicare. You must accept Part A while receiving Social Security benefits. You should delay Social Security benefits and decline Part A if you wish to continue contributing to your HSA.

Finally, the best strategy for using an HSA is as follows:

1. Maximize annual contributions to your HSA account.
2. Keep track of medical receipts and delay reporting expenses to a later date. The objective is to allow the funds in the HSA to grow tax-free. By reporting expenses later, you can take advantage of investment growth and leverage inflation. 
3. Continue contributing to your HSA for as long as possible and postpone withdrawing from Medicare and Social Security if you continue working after the age of 65.
4. Prioritize HSAs (limited to your qualifying medical expenses once you turn 65 and are no longer subject to the 20% penalty for withdrawals not spent on medical expenses) over your retirement accounts because your kids and Other non-spousal heirs will inherit a tax-advantaged retirement account instead of an HSA.

By following these strategies, you can make the most effective use of your HSA and optimize your financial planning for healthcare expenses and retirement.

​The Texas Emergency Preparation Supplies Sales Tax Holiday is an annual event held in Texas to encourage residents to prepare for emergencies by offering a temporary exemption from sales tax on emergency preparation supplies. The holiday typically takes place during late April, right before the start of hurricane season. It was established to raise awareness about the importance of being prepared for natural disasters like hurricanes, floods, and wildfires. During this tax-free period, Texans can purchase essential items such as batteries, flashlights, generators, and first aid kits without paying state sales tax, making it easier for families to build their emergency preparedness kits and safeguard their homes and loved ones. The holiday serves as a reminder for the community to take proactive steps in ensuring their safety and resilience during times of crisis.

Website: ​https://comptroller.texas.gov/taxes/publications/98-1017.php