A really neat thing happens when you turn 70 and ½. Your IRAs essentially turn into donor advised funds if you don’t need all the money in them to make ends meet. Rather than withdraw money from your IRA to make charitable contributions, you can make them out of the IRA. So instead of an itemized deduction, you get an exclusion from adjusted gross income. For some people this might be a wash, but for most it probably isn’t. Besides the possibility of not being over the standard deduction threshold, there are a host of computations and thresholds that involve AGI. There are some things you need to watch out for, but first let’s go over the basics.
Tackling Taxes On an Inherited HSA
Keith Schroeder, EA
The Health Savings Account (HSA) is a first line of defense tax strategy. Contributions are deductible and earnings are tax-free if used for qualified medical expenses. There are numerous features to the HSA that secure maximum tax benefits. Structured properly, an HSA can provide serious tax-free money to beneficiaries as well as the account holder. Before we review the implications of inheriting an HSA, let’s review some of the powerful features an HSA has that increases the value of the account.
