what is the percentage of tax and penalty on a health savings account?

Question

I opened a Health savings account in 2007, I used some of the money to pay off some non medical bills, I was wondering what the income tax and penalty would be for this?

Answer 1

Any distributons used for any purpose other than qualified medical expenses is included in your gross income for the year and is taxed as ordinary income. Therefore the tax depends upon your marginal rate. If you're in a 25% tax bracket, the tax would be 25% of the prohibited distribution. Additionally there is a 10% penalty tax on top of that. The 10% penalty tax does not apply to distributions that occur after the date you become disabled, turn age 65, or die.

Answer 2

It also depends what state you're in. In California, the state doesn't recognize that HSA's exist. So there's no STATE tax or penalty for taking it out, since they tax the money that you put in. You just pay the Federal.

Answer 3

wellbeing value reductions account accrues pastime and the stability is only as extreme as you have already contributed out of your examine. The stability isn't use it or lose it and could be carried over 12 months after 12 months and from company to company. wellbeing repayment oftentimes you get your 12 months's contributions good away in the previous the money is technically interior the account. It does no longer accrue pastime and could no longer carry over to the subsequent term.