The Pros and Cons of Health Spending Accounts
Most Americans know changes are coming in the health care industry, and there is a lot of debate going on about how the new healthcare laws will affect small business owners. The same is true for residents in Canada, actually. If you are currently living in Canada and are looking for legal ways to save money on taxes, you might want to start looking for tax tips canada. There are some strategies you can use to save on taxes that most people do not know about. One example is how a health spending account will affect your taxes. We all know we have to pay for health care expenses, whether you are purchasing your own coverage, or receiving health benefits from your employer.
Some people pay up to 48 percent on personal income tax in Canada. The amount that is left over after taxes will cover health care costs. However, if you use a health spending account, you get to choose how much you want to designate for your health care spending account before taxes. You choose a specific percentage of your income that will be deposited into a trust account for the sole purpose of covering health care expenses. If you pay out of pocket for health care expenses, you can use your health spending account for reimbursement.
In other words, you have more control over your money with health spending accounts, as well as more options on how to pay for health expenses. If you have financial dependents, like children or grandchildren, you can use your HSA Canada to cover their health expenses as well. The biggest benefit associated with a health spending account is the ability to avoid a certain amount of taxes. Health spending accounts provide you tax free money to cover any health emergencies that require emergency finances.