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Nov 14, 2023

Self Employed HSA Rollover Options

As a self-employed individual, having a Health Savings Account (HSA) can provide you with valuable tax advantages and flexibility in managing your healthcare expenses. One important aspect of an HSA is the ability to rollover funds from one year to the next. In this blog post, we will explore the various rollover options available to self-employed individuals with an HSA.

Rollover to the Next Year

1. Rollover to the Next Year

One option for self-employed individuals with an HSA is to simply rollover any unused funds to the next year. Unlike Flexible Spending Accounts (FSAs), HSAs do not have a "use it or lose it" policy. This means that any funds remaining in your HSA at the end of the year will automatically carry over to the following year.

By choosing to rollover funds, you can continue to grow your HSA balance and use it for future healthcare expenses. This can be particularly beneficial if you anticipate higher medical costs in the future or if you want to save for healthcare expenses during retirement.

Transfer to a New HSA Provider

2. Transfer to a New HSA Provider

If you are not satisfied with your current HSA provider or if you find a better option elsewhere, you have the option to transfer your HSA funds to a new provider. This can be done without incurring any tax penalties or losing the tax advantages associated with an HSA.

When transferring your HSA, it is important to research and compare different providers to ensure that you choose one that meets your needs. Consider factors such as fees, investment options, customer service, and online tools and resources.

Convert to an Individual Retirement Account (IRA)

3. Convert to an Individual Retirement Account (IRA)

Another option for self-employed individuals with an HSA is to convert the funds into an Individual Retirement Account (IRA). This can be done if you no longer need the funds for healthcare expenses and want to use them for retirement savings instead.

By converting your HSA funds to an IRA, you can continue to enjoy the tax advantages of the HSA while also benefiting from the long-term growth potential of an IRA. However, it is important to note that once the funds are converted to an IRA, they can no longer be used for healthcare expenses without incurring taxes and penalties.

Use for Qualified Medical Expenses

4. Use for Qualified Medical Expenses

Lastly, self-employed individuals with an HSA can choose to use their funds for qualified medical expenses. This includes a wide range of healthcare costs, such as doctor visits, prescription medications, and medical procedures.

Using your HSA funds for qualified medical expenses not only allows you to take care of your health but also provides you with valuable tax benefits. HSA contributions are tax-deductible, and withdrawals for qualified medical expenses are tax-free.

It is important to keep track of your medical expenses and save receipts to ensure that you can properly document your HSA withdrawals for tax purposes.



As a self-employed individual with an HSA, you have several rollover options available to you. Whether you choose to rollover funds to the next year, transfer to a new HSA provider, convert to an IRA, or use for qualified medical expenses, it is important to carefully consider your options and make the choice that best aligns with your financial goals and healthcare needs.

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