health savings account

[suk wah bernstein]

my tax person says it's an asset account. i'll edit account when i go into
gnucash next time.

i'm in us. self-employed. high deductible plan with no dental or vision
coverage. so hsa works for us. my husband just had an emergency root canal
and now it's tax-deductible.

i don't even want to think about how many tax dollars we would have saved if
we had this set up before 4/15/2011. better late than never.

respect
suk wah

On Thu, Oct 27, 2011 at 10:58 AM, Richard Bishopp <rbishopp44 at gmail.com>wrote:

> Hi David.  I'm not an accountant either.
>
> I have an HSA and next year will add an FSA. They are different types of
> accounts.  The FSA, like you describe, is money up front that I will have
> deducted from each pay check to pay back.  Use it or loose it.
> The HSA can also be funded from my pay but in my case my employer
> contributes a lump sum twice a year for me to use toward the
> high deductible medical insurance.  So that money isn't there until they
> put
> it there which last year was the end of January and then July. The plus
> with
> the HSA is that any excess funds in that account stay there into the next
> year and so on. The account earns interest and if enough I'll have to pay
> taxes on the interest. Payroll deductions are pretax as with the FSA.  I'm
> hoping the FSA money will be available early in January if I need it.
> So my plan will be to create the FSA account and use that until it's gone
> then switch over to the HSA money.
>
> So you made your FSA a liability account only.  Nothing in the Assets ?  So
> when you use the FSA for a medical bill you record a deduction from the FSA
> liability and show the expense in the appropriate Expense account?  How
> does
> a split from a pay check look ?  Must look like a deposit ?  I guess you
> can
> tell I don't use the Liability accounts.  I have no outstanding debt except
> a credit card that I pay down to zero frequently.
>
> Rich...
>
>
>
> On Thu, Oct 27, 2011 at 1:27 PM, David T. <sunfish62 at yahoo.com> wrote:
>
> > RE: Equity vs. Asset
> > I don't know; as I noted in the email, I am not an accountant. When I set
> > up my FSAs, I spent a lot of time with help from others on this list, and
> > that's where these accounts ended.
> >
> > RE: Liability or not
> > My understanding of HSA/FSA accounts is that you the contributor agree at
> > the start of the year that you are going to pay a certain dollar amount
> into
> > the account, which you expect to use during that year for qualifying
> > expenses. On each paycheck then, you are automatically charged for a
> portion
> > of the amount you committed to pay. Unless you have some life-changing
> > (defined by the IRS) event, you still have to pay this amount over the
> year.
> > Even though it hasn't been taken yet, it will be. Therefore, you are
> liable
> > for the amount you said you were going to pay. To me, that's a liability.
> >
> > Or, maybe you have some different kind of HSA than I ever have had. If
> so,
> > then you're luckier than I am.
> >
> > David
> >
> > ------------------------------
> > *From:* FireFly <fireflys_98 at yahoo.com>
> > *To:* David T. <sunfish62 at yahoo.com>; Richard Bishopp <
> > rbishopp44 at gmail.com>; suk wah bernstein <sukwahbernstein at gmail.com>
> > *Cc:* "gnucash-user at gnucash.org" <gnucash-user at gnucash.org>
> > *Sent:* Wednesday, October 26, 2011 10:41 PM
> >
> > *Subject:* Re: health savings account
> >
> > *From:* David T. <sunfish62 at yahoo.com>
> > ***Subject:* Re: health savings account
> >
> > >That said, Health Savings Accounts in the US are a complicated thing,
> and
> > different than US Dependent Care accounts.
> > >Generally*, these accounts are considered a Liability, since you agree
> > with some agency (the FSA provider) to contribute
> > >a certain amount of money to the account over the year. The liability
> > account balance
> > >gets set at the beginning of the year to the dollar amount you say your
> > >FSA will receive over the year.
> >
> > Why would it be an equity account vs an asset? I've always had my FSA
> setup
> > as an Asset account, and I certainly plan to setup my HSA as an Asset
> since
> > it really is (it's held at a bank and everything). The liabilty bit gets
> > interesting, for an FSA it totally made sense (to me) since I could use
> it
> > all Jan 2nd, and slowly repay it over the year, for an HSA (at least with
> my
> > company) I can't, have to wait until I've got enough in my HSA before I
> can
> > claim it.
> >
> > - James Duerr
> >
> > E-mail: FireFlys_98 at yahoo.com
> > ---------------------
> > Discover a lost art - play Marbles. May 2004
> > www.marillion.com
> > ------------------------------
> > **
> >
> >
> >
> _______________________________________________
> gnucash-user mailing list
> gnucash-user at gnucash.org
> https://lists.gnucash.org/mailman/listinfo/gnucash-user
> -----
> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.
>