Health Savings Accounts

A health savings account is like an IRA for medical expenses, but only better. Your contributions to it are deductible and when you take money out for medical expenses, it isn't taxable.  In reality, you have shifted medical expenses from itemized deductions subject to a reduction of 7.5% of your adjusted gross income to page 1 of the tax return where it is 100% deductible. You must be covered under a high deductible health plan and you cannot be enrolled in medicare. You can even make contributions for the previous tax year by the due date of the return, so for 2010 you had until April 18, 2011 to make a tax deductible contribution. I like it.