HSA contributions can help if you have high deductibles

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Q: Our family is enrolled in health insurance through my husband's employer, but with three young kids we spend quite a bit of time and money going to various doctors. Is there anything we can do to help bring down our taxable income with our medical expenses?

S.R., Lake Mary


A: Yes. If you have a high-deductible health plan your family can contribute up to $6,750 per year (or $7,750 at age 55) through a Health Savings Account (HSA), which is deducted against ordinary income. Plus, any HSA growth and future distributions may be tax-free if distributions are used for qualified medical expenses.

John West


Q: If I purchase investments that decrease in value, can my heirs get the original (higher) cost basis, or must they take the "time of death" (lower) cost basis? And what happens to a carryover capital-gain loss that still exists after my final tax return? Are these questions impacted if the investments are in a trust, and my heirs become the trustees? — C.T., Grand Island

A: Cost basis will be the value at date of death, even if lower than when originally purchased. Carryover capital losses beyond your final personal tax return will be lost. Assets in a revocable living trust will be impacted the same.

Mike Salmon

Have a question? E-mail Include your name (only your initials will be printed), hometown and phone. Questions are answered by Certified Financial Planners from the Central Florida chapter of the Financial Planning Association. Answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for space considerations.