If you're looking for a powerful way to save for healthcare costs while reducing your tax burden, a Health Savings Account (HSA) might be one of the smartest financial tools available. HSAs are more than just a place to stash money for doctor visits - they offer a triple tax advantage that can benefit you today and build long-term security for the future.  

Remember when it comes to your taxes make sure to check in with your tax advisor to see if a health savings account makes sense for your financial goals. 

So, let’s get into it and let's break down exactly what that means - and why it matters.  

1. Tax-Deductible Contributions  

When you contribute to an HSA, the money you deposit is tax-deductible, even if you don’t itemize deductions on your tax return. That means the money goes in before taxes, reducing your taxable income for the year.  

Example: If you contribute $3,000 to your HSA this year, you may reduce your taxable income by that amount - potentially tax savings depending on your tax bracket.  

For those enrolled in a High-Deductible Health Plan (HDHP), this upfront tax break makes HSAs an easy win.  

2. Tax-Free Growth  

Unlike a standard savings account, the money in your HSA can grow through interest or investments - and that growth is completely tax-free. Any dividends, interest, or capital gains earned within your HSA are yours to keep without owing Uncle Sam a penny.  Not all HSA providers offer investment options, so it is important to consider your long-term financial goals when choosing where to open your account. *

This is especially powerful if you treat your HSA like a long-term savings or retirement account. By investing your HSA dollars, you can allow them to grow significantly over time and use them tax-free later for qualifying health expenses.  

3. Tax-Free Withdrawals for Qualified Expenses  

When you use your HSA funds for qualified medical expenses, those withdrawals are also tax-free. That’s right - money goes in tax-free, grows tax-free, and comes out tax-free.  

Qualified expenses include doctor visits, prescriptions, dental care, vision exams, mental health services, and even some over-the-counter items and wellness products. You can find a full list in IRS Publication 502 or connect with one of our amazing Relationship Bankers. We also have a quick guide cheat sheet you can download to get you started.   

Bonus: HSAs and Retirement  

Once you turn 65, your HSA becomes even more versatile. While you’ll still pay no taxes when using the funds for qualified medical expenses, you can also withdraw funds for non-medical expenses—just like a traditional IRA. You’ll pay ordinary income tax on those non-medical withdrawals, but no penalty.  

That makes an HSA a flexible tool for retirement planning. With healthcare costs in retirement often topping six figures, having tax-free money set aside just for that purpose is a smart move.  

Is an HSA Right for You?  

If you’re enrolled in a High-Deductible Health Plan, opening an HSA could be one of the most tax-efficient decisions you make this year. Whether you’re a parent planning for braces, a business owner looking to maximize benefits, or a professional saving for retirement, the triple tax advantage of an HSA can help you spend smarter, save more, and stress less. 

This blog is for informational purposes only and not financial advice. Consult a qualified financial professional or tax advisor before making any financial decisions. 

*As of July 31, 2025, Profinium does not offer an investment option for HSAs. 

Products and services may require enrollment, other terms and conditions and fees may also apply. Connect with a Relationship Banker or visit Profinium.com/health-savings-account    

Contribution limits may change each year. You can withdraw funds at any time for any purpose. However, if funds are withdrawn for reasons other than qualified medical expenses, the amount withdrawn will be included as taxable income, and may be subject to a 20% penalty. No minimum balance requirements after $100 minimum deposit to open the account. Fees may reduce earnings. The minimum balance required to obtain the APY is $0.01. Rates may change after the account is opened without notice. Additional terms and conditions may apply.