@Mike9241 wrote:
an HSA contribution reduces your adjusted gross income. if your itemized deductions exceed $30,000 (mortgage interest, contributions, taxes (as limited) then it's likely there would be no tax benefit to contributing to an HSA.
Are you sure that's correct? I would at least qualify that by saying that in this case, where the taxpayer's gross income is expected to be $30,000, an HSA would not help if their itemized deductions are over $30,000. That comment certainly doesn't apply to other taxpayers.
And it ignores the long term benefits of the HSA. Since money earns interest tax-free, and can be withdrawn at age 65 for any purpose (paying income tax) or for medical purposes tax-free, a fully funded HSA is like a super-IRA. It has all the tax benefits of a traditional IRA plus the ability to pay medical expenses tax-free. (You won't get much growth if you stick to a bank's 0.0000% savings account interest, but many HSAs will allow you to invest part of your funds in mutual funds or other investments.)
