6 Best Tax Deductions for 2019 to Take Advantage Of

4. Health Savings Account contributions

A Health Savings Account (HSA) works much like a traditional 401(k) retirement account, deduction-wise, as you fund it with pre-tax money, thereby lowering your tax bill. That money can be used tax-free for qualifying healthcare expenses.

The money in the account can accumulate over many years, invested and growing. Once you turn 65, you can withdraw money from your HSA for any purpose, paying ordinary income tax rates on withdrawals.

HSA contribution limit is $3,450 for individuals and $6,900 for families for 2018. Those numbers rise to $3,500 and $7,000, respectively, in 2019, and in both years, those 55 or older can chip in an additional $1,000. Note that any employer contributions to your HSA are not deductible.

You’ll need to have a qualifying high-deductible health insurance plan to contribute to an HSA and you generally must not have any other health coverage, either. Learn the rules, because an HSA can deliver tax deductions plus potential retirement savings, as well.