Hi everyone and welcome back to Money Girls Quick and Dirty Tips for a richer life.

I'm Laura Adams.

Several weeks ago I talked about the benefits of health savings accounts or

HSAs.

These nifty government-sponsored accounts are allowed for anyone who's covered by a high deductible health

plan.

You avoid paying tax on HSA contributions and earnings when you spend the money on certain medical

expenses or reimburse yourself for them.

In this show, I'll cover some of the changes that are coming down the pipe for

HSAs due to health care reform.

I'll also tell you what you can pay for with an HSA and the best places to find one.

Let's start by reviewing the types of expenses that you can pay for with money you contribute to

an HSA.

They include medical and dental expenses that are normally tax deductible

when you itemize deductions on your tax return. But please note that you can't pay for expenses

with HSA funds and claim a tax deduction for the same expenses.

That would be double dipping on tax benefits which the IRS doesn't allow.

However, the IRS does allow you to take a tax deduction for your HSA contributions, even if you don't itemize

deductions on your tax return. Tax deductible medical expenses are defined as costs

for the diagnosis, treatment, or prevention of disease.

They include the cost of prescription drugs, medical equipment, medical supplies, long-term care

services, most insurance premiums, dental expenses, and vision expenses.

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