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Azzad Asset Management - An HSA has 3 tax benefits, not found in any other account type. First, contributions are tax-deductible. Second, there is no taxation on funds while they are growing in the account, and third, distributions taken for qualified medical expenses are tax-free. That’s a sweet deal! An HSA essentially offers you the tax-deduction and tax-deferral of a 401K combined with the tax-free withdrawal on earnings (used for qualified expenses) of a Roth IRA. Like these accounts, there are eligibility rules for who is qualified to contribute and what you can spend the money on. Similarly, you can invest your HSA in one of Azzad’s investment products. Here’s how an HSA works: each year, you decide how much you want to contribute to your account (up to the IRS maximum limits). You can use the funds in your account to pay for eligible medical expenses not covered by your plan (note: insurance premiums aren’t eligible). Unlike a Flexible Spending Account (FSA), your balance rolls over from year to year, so you never have to worry about losing your savings. Plus, once you reach age 65, you can withdraw from your HSA for any reason. Of course, you’ll pay taxes on distributions used for non-medical expenses, but no penalty. You never pay a penalty on any distributions after age 65. To qualify for an HSA, you must be enrolled in a high-deductible health insurance plan (HDHP) as defined by the IRS every year. The IRS determines the minimum deductible your plan must have and the maximum amount you can spend out-of-pocket. If in doubt, ask your insurance broker if your plan is “HSA-eligible”. Once you’re over age 65 and enrolled in Medicare, you are no longer eligible to contribute to an HSA. Of course, you can still use your funds to pay for out-of-pocket medical expenses. Your HSA continues to offer you powerful tax benefits, including more flexibility with your tax and penalty-free distributions. Navigating HSAs can be confusing, so give us a call to find out if an HSA can work for you?

A health savings account (HSA) can deliver triple tax benefits. Is one right for you?

An HSA has 3 tax benefits, not found in any other account type. First, contributions are tax-deductible. Second, there is no taxation on funds while they are growing in the account, and third, distributions taken for qualified medical expenses are tax-free. That’s a sweet deal! An HSA essentially offers you the tax-deduction and tax-deferral of a 401K combined with the tax-free withdrawal on earnings (used for qualified expenses) of a Roth IRA. Like these accounts, there are eligibility rules for who is qualified to contribute and what you can spend the money on. Similarly, you can invest your HSA in

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Azzad Asset Management April 12, 2021 5:50 pm
10 lessons every investor should have learned from last year

10 lessons every investor should have learned from last year

Ehab AlalfeyAzzad Investment Advisor It’s been more than a year since the coronavirus pandemic began. While there remain many unknowns, let’s reflect on 10 lessons investors should have learned from 2020. If we could have somehow warned you that a pandemic was going to trigger a steep economic decline, including a stock market crash last year, you would have spent the entire year in cash, right? Odds are you’d still be in cash. Having missed out on historic gains, you’d be waiting for the next crash. That is Lesson #1: market predictions are useless. If, by luck, you’re partially right,

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Azzad Asset Management March 26, 2021 4:00 pm
American Rescue Plan Act Provides Relief to Individuals and Businesses

American Rescue Plan Act Provides Relief to Individuals and Businesses

On Thursday, March 11, 2021, the American Rescue Plan Act of 2021 (ARPA 2021) was signed into law. This is a $1.9 trillion emergency relief package that includes payments to individuals and funding for federal programs, vaccines and testing, state and local governments, and schools. It is intended to assist individuals and businesses during the ongoing coronavirus pandemic and accompanying economic crisis. Major relief provisions are summarized here, including some tax provisions. Recovery rebates (stimulus checks) Many individuals will receive another direct payment from the federal government. Technically a 2021 refundable income tax credit, the rebate amount will be calculated

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Azzad Asset Management March 24, 2021 4:00 pm
Due Date for Federal Income Tax Returns and Payments Postponed to May 17

Due Date for Federal Income Tax Returns and Payments Postponed to May 17

Due to the unusual conditions related to the coronavirus pandemic, the due date for individuals to file 2020 federal income tax returns and make tax payments has been postponed by the IRS from Thursday, April 15, 2021, to Monday, May 17, 2021. No interest, penalties, or additions to tax will be incurred by taxpayers during this approximately one-month relief period for any return or payment postponed under this relief provision. The relief applies automatically to all taxpayers and no additional forms need to be filed to qualify for the relief. The new deadline applies to federal income tax payments for

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Azzad Asset Management March 24, 2021 2:53 pm

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