Medical Savings Accounts

Medical Savings Accounts

by Bernard Fruchtman, Esq.
(This article is excerpted from TaxTalk – Plain & Simple)

Background:

Since Jan 1, 1997 small businesses and self-employed persons have been allowed to establish Medical Savings Accounts (MSAs).

MSAs are like IRA’s for medical expenses. Contributions are put into an account and invested. The money canbe withdrawn from the MSA to pay qualified medical expenses.

MSA’s can only be established by businesses with no more than 50 employees and self-employed persons. It’s a pilot program and only open to 750,000 taxpayers. It’s first come first served so the early bird will get the worm. No new MSA’s will be allowed after 750,000 are established More…