high deductible health plan
A type of health insurance where you pay more of your own medical bills upfront before the insurance company starts helping you pay.
Where it is explained in full
The health savings account: three tax breaks and one gate. The account people describe with the most excitement and understand the least. It does something no other account does, and there is a gate in front of it that many people cannot walk through.
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Words beside it
- 529 plan
A state sponsored education savings account with tax free growth for qualified expenses.
- Deductible
What you pay before insurance starts paying.
- health insurance
A plan you pay for regularly that helps cover the cost of medical care so you are not paying the full bill yourself. You usually must have a specific type called a high deductible health plan to open an HSA.
- health savings account
A special bank account the government allows you to open so you can save money specifically for medical costs and get tax benefits while doing it.
- High yield savings account
A savings account paying a competitive rate, usually online.
- nondeductible
This describes money you put into an account that you already paid taxes on, so you cannot subtract it from your taxable income that year. It matters because it affects how much tax you owe later when you take the money out.
- nondeductible contribution
A nondeductible contribution is money you put into a traditional IRA but cannot subtract from your taxable income that year. You still pay normal income tax on it upfront, which matters later when you convert it.
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