Can a self-employed person have a Health Savings Account?
"Whether you can establish an HSA has nothing to do with your employment status or your retirement plan. It has to do with the type of medical insurance you have.  The insurance company should be able to tell you if your plan is ""HSA compatible"". To be HSA compatible, a plan must have a ""high deductible"" -- in 2014, $1250 for an individual plan or $2500 for a family plan. It must not cover any expenses before the deductible, that is, you cannot have any ""first dollar"" coverage for doctor's visits, prescription drug coverage, etc. (There are some exceptions for services considered ""preventive care"".) There are also limits on the out-of-pocket max. I think that's it, but the insurance company should know if their plans qualify or not. If you have a plan that is HSA compatible, but also have another plan that is not HSA compatible, then you don't qualify. And all that said ... If you are covered under your husband's medical insurance, and your husband already has an HSA, why do you want to open a second one? There's no gain. There is a family limit on contributions to an HSA -- $6,550 in 2014. You don't get double the limit by each opening your own HSA. If you have two HSA's, the combined total of your contributions to both accounts must be within the limit. If you have some administrative reason for wanting to keep separate accounts, yes, you can open your own, and in that case, you and your husband are each allowed to contribute half the limit, or you can agree to some other division.  I suppose you might want to have an account in your own name so that you control it, especially if you and your husband have different ideas about managing finances. (Though how to resolve such problems would be an entirely different question. Personally, I don't think the solution is to get into power struggles over who controls what, but whatever.) Maybe there's some advantage to having assets in your own name if you and your husband were to divorce. (Probably not, though. I think a divorce court pretty much ignores whose name assets are in when dividing up property.)  See IRS publication 969, http://www.irs.gov/publications/p969/index.html for lots and lots of details." IRS Publication 969 gives all the details about HSA accounts and High Deductible plans: According to your question you are covered by a plan that can have an HSA.  There a few points of interest for you: Contributions to an HSA Any eligible individual can contribute to an HSA. For an employee's   HSA, the employee, the employee's employer, or both may contribute to   the employee's HSA in the same year. For an HSA established by a   self-employed (or unemployed) individual, the individual can   contribute. Family members or any other person may also make   contributions on behalf of an eligible individual. Contributions to an HSA must be made in cash. Contributions of stock   or property are not allowed. That means that yes you could make a contribution to the HSA. Or if in the future you were the provider of the insurance you could have a HSA. Limit on Contributions  For 2015, if you have self-only HDHP coverage, you can contribute up   to $3,350. If you have family HDHP coverage you can contribute up to   $6,650. It sounds like you have a family plan. Additional contribution.   If you are an eligible individual who is   age 55 or older at the end of your tax year, your contribution limit   is increased by $1,000. Rules for married people.   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. If   each spouse has family coverage under a separate plan, the   contribution limit for 2014 is $6,550. You must reduce the limit on   contributions, before taking into account any additional   contributions, by the amount contributed to both spouses' Archer MSAs.   After that reduction, the contribution limit is split equally between   the spouses unless you agree on a different division. The rules for married people apply only if both spouses are eligible   individuals. If both spouses are 55 or older and not enrolled in Medicare, each   spouse's contribution limit is increased by the additional   contribution. If both spouses meet the age requirement, the total   contributions under family coverage cannot be more than $8,550. Each   spouse must make the additional contribution to his or her own HSA. Note: most of the document was written with 2014 numbers, but sometimes they mention 2015 numbers. If both are covered under a single plan it should be funded by the person that has the plan. They may get money from their employer. They may be able to have the employer cover the monthly fee that most HSA administrators charge. The non employee can make contributions to the account but care must be taken to make ure the annual limits aren't exceeded. HSA contributions from the employees paycheck may reduce the social security tax paid by the employee. If the non-employee is self employed you will have to see how the contribution impacts the social security situation for the couple. If the non-employee is 55 or older it can make sense to throw in that extra $1000. The employer may not allow it to come from the paycheck contributions because they wouldn't necessarily know the age of the spouse, they may put a maximum limit based on the age of the employee.
If you're under age 55 and in good health generally you cannot withdraw your funds from super and your super fund cannot provide you with any financial assistance eg lend you money. However, for a very small percentage of people with unrestricted non preserved superannuation components ( check your statement most people's superannuation is 'preserved'which means they cannot access it until they meet a 'condition of release')they may withdraw their super benefits upto the unrestricted non preserved amount. For healthy (& able) persons  aged 55 and over they may access their super under the following conditions: I can understand your frustration of having your money compulsory tied up in superannuation especially given the poor investment returns of the past 5 years. However, superannuation may be more flexible than you realize, I am an adviser at Grant Thornton and I am constantly telling clients that superannuation is not an invest but it the most tax effective long term savings vehicle available to Australians for their investment savings eg max 15% tax on income and capital gains if held for a year are taxed at 10%.  If you're not happy with your investment returns you may like to seek some advice or,set up your own super fund - a self managed super fund where you can invest a wide variety of assets; shares, managed funds,cash, term deposits, property( your super fund can even borrow to help acquire the property) I hope this helps It's not typically possible for someone to jointly own the house, who is not also jointly liable for the mortgage. This doesn't matter however, because it is possible for two people to get a mortgage together, where only one person's income is assessed by the lender. If that person could get a mortgage of that amount on their own, then the couple should also be able to get the same mortgage. Source: My wife and I got a mortgage like this. She is self-employed, rather than meet the very high requirements for proving her self-employment income, we simply said that we only wanted my income to be taken into consideration. If you want to subcontract some of your excess work to somebody else, you better be in business!  While some kinds of employees (e.g. commissioned salespeople) are permitted to deduct some expenses on their income tax, generally only a real business can deduct wages for additional employees, or the cost of services provided by subcontractors. Do you invoice your clients and charge HST (GST)?  Or do you tell your clients each pay period how many hours you worked and they compensate you through their payroll system like everybody else that walks through the door?  If you're not invoicing and charging HST (GST) (assuming you exceed the threshold, and if you have too much work, you probably do!), then perhaps your clients are treating you as an employee – by default – and withholding taxes, CPP, and EI so they don't get in trouble? After all, Canada Revenue Agency is likely to consider any person providing a service to a company to be an employee unless there is sufficient evidence to the contrary, and when there isn't enough evidence, it's the company paying for the services that would be on the hook for unpaid taxes, CPP, and EI. Carefully consider what form of business you are operating, or were intending to operate.  It's essential for your business to be structured appropriately if you want to hire or subcontract.  You ought to be either self-employed as a sole proprietor, or perhaps incorporated if it makes more sense to your situation.  Next, act accordingly. For instance, it's likely that your business should be taking care of the source deductions, CPP, and EI.  In fact, self-employed individuals shouldn't even be paying into EI – an independent contractor wouldn't qualify to make an EI claim if they lost a contract. As an independent, one doesn't have a job, one has a business, and EI doesn't cover the business itself, only the employees that the business deals with at arm's length.  As a business owner, you would be considered non-arms-length, and exempt from EI. Growing your business in the way that you are suggesting is an important enough a step that you should seek professional advice in advance.  Find a good accountant that deals with self-employed individuals & small businesses and run all this by him.  He should be able to guide you accordingly.  Find a lawyer, too.  A lawyer can guide you on how to properly subcontract others while protecting you and your business. Finally, be mindful of what it is you agreed to in your contract with your client:  Do they expect all services to be performed by you, personally?  Even if it wasn't written down who exactly would be performing the services, there may be an assumption it's you.  Some negotiation may be in order if you want to use subcontractors. "HSAs as they exist today allow a person to contribute tax deductible money (like a traditional IRA) to a savings account.  The funds in the savings account can be spent tax free for qualified expenses.  If the money is invested it also grows tax free.  This means a discount on your cash health expenses of the amount you would have paid in taxes, which given your relative's income isn't likely to be very much. As HSAs exist today they must be paired to a qualified High Deductible Health Plan (HDHP).  Many plans have a deductible that meets or exceeds the level set by the regulations but many plans waive the deductible for things like X-Rays; waiving the deductible causes most ""high deductible"" plans to not qualify for HSA accounts. There are other qualified HSA expenses like Long Term Care (LTC) insurance premiums that can also be spent tax and penalty free from HSA funds. At age 60 with low income an HSA serves little purpose because the tax savings is so marginal and an HDHP is required.  That does not however mean that the scope of HSA availability should not be expanded.  Just because this is not a silver bullet for everyone does not mean it is of no use to anyone." If you know you will have a big bill, like braces. and you fully expect to hit the deductible then it can make sense. The deductible can trip some people up, because if they put too much into the limited purpose FSA and don't hit the deductible for the regular insurance policy, they can't get to all the money in the FSA. Because you have the ability to spend the potential money in the FSA before all the money has been contributed, it can allow you to make that payment for the braces in January. I did this the first year we had the HSA. I knew I needed to pay a dental bill early in the year. But the HSA would only have a few hundred dollars at that time, so I used the limited purpose FSA to be able to make that payment. This could also work if you spent a lot of money in the previous year. Because you have the ability to adjust how much money goes into the HSA each each pay period, this idea does keep the option open to fully fund the HSA if your finances improve. Regarding the deductible.  The law limits what you can use the limited purpose FSA for: dental and vision only. There is an exception. If you hit the deductible for the high deductible insurance policy, then you can use the funds in the limited purpose FSA for ANY medical reason.  When I did this a few years ago, I needed to send extensive paperwork to the company holding the funds before they would release the funds for dental. Once I sent them proof that I had met the deductible, then any medical expense after that date could use the FSA with minimal paperwork. If you fully fund the FSA beyond the cost of the braces, and then have a light year medical expense wise, you might not be able to spend all money in the FSA by the deadline. Regarding state taxes.  I saw no difference in my states (Virginia) treatment of the funds. The state taxable income number was exactly the same as the federal taxable income number. It did not treat the money in the FSA differently than the money in the HSA. You do not need to file 1099-MISC to yourself if you're running as a sole proprietor - you are yourself. However, you do not deduct this amount from your business income and report it as royalties either. Your self-published book is your business income subject to SE tax. You can only deduct the actual costs of producing/writing, and the remaining amount is your Schedule C income. Checking accounts can't pay interest, according to the bizarre and outdated Regulation Q. Under the even more bizarre and outdated Regulation D, you can only transfer money out of savings accounts six times per 4 weeks. Your HSA account is probably set up the way it is because the bank wants to be able to tell people they'll earn interest on their savings (although I'll betcha the current rate is something like 0.000000000001%). As far as I know, there's no reason an HSA couldn't be a straight checking account. You wouldn't get interest but you would get more than 6 withdrawals per month. Or, you could do the transfers yourself from savings to checking just keep enough money in the checking part of the account so that the automatic transfer doesn't kick in. Every bill you write counts as income (if the bill doesn't get paid, you would count that as an expense). In cases where you don't write bills, I think the payment you receive would count as income, but you might check that on the HMRC website. So to record your income, you can basically record the payments that you receive.  Anything you pay out for your business is an expense. You keep a receipt for every expense - if you don't have a receipt, you can't count it as an expense, so keeping all the receipts is very, very important. An exception are investments, for example buying a computer that should last multiple years; there you can count a percentage of the investment as expense every year.  All income, minus all expenses, is your profit. You pay tax and National Insurance contributions according to your profit. You can do whatever you like with the profit.  Notice that I didn't mention any salary. Self employed means you have no salary, you have profits and do with them whatever you like. On the other hand, you pay taxes on these profits almost exactly as if they were income.  If you have this blog but are also employed, you'll add the profits to your normal income statement.