Tax Moves to Make to Help Prepare for a Recession

March 10, 2023

USA Today
by Kerri Anne Renzulli and Taylor Tepper

Ann Reilley of Alpha Financial Advisors contributed to this article that appeared on USA Today. To read the article, please go to:    


Below is an excerpt from the article:

Contribute to an HSA

If you’re enrolled in a high-deductible health plan, open and contribute to a health savings account (HSA). These special accounts let you lock away money for medical expenses while enjoying three distinct tax benefits:

  • Contributions reduce your taxable income.
  • Any investment earnings grow tax-free.
  • Withdrawals used for qualified health-care expenses go untaxed.

But the reason you’d want to fund a HSA before a possible recession and amid job loss fears comes from its possible transformation into a secondary emergency fund of sorts.

As long as you have an unreimbursed past healthcare expense, you can withdraw an amount equal to that bill at any time from your HSA and then use that cash for any purpose.

To do this without triggering a 20% tax penalty or income tax, the HSA needs to be set up prior to incurring the medical cost and can’t have been tapped to cover that bill already.

“There are no statute of limitations, so hold onto your receipts and withdraw that money to reimburse yourself whenever,” said Ann Reilley, chief executive of Alpha Financial Advisors in Charlotte.

For 2023, you can save up to $3,850 if you have self-only coverage, or $7,750 if you have family coverage. Those age 55 or older can stash an extra $1,000.