My girlfriend and I recently discovered that we can utilize the domestic partner loophole to each contribute the family maximum to an HSA. This would allow us to save an additional ~$8000 into the HSA each year. However, this $8000 currently goes into my mega backdoor Roth IRA.
I know that HSA would typically be favored, but I imagine if we take advantage of this loophole and continue to max ~16k (or even just ~8k once we are no longer domestic partners), we would have a larger HSA balance than we could reasonably spend on health care expenses. In this case, the money would just get the pretax benefit. Is this still more valuable over having extra Roth money?
Additional info:
Both 26
230k combined income
Extra HSA Money vs. Extra Roth Money
byu/SaltPacer infinancialindependence
Posted by SaltPacer
3 Comments
correction: it’s not 8k “additional” for family coverage for an HSA. Individual max contribution is 4.3k and family max contribution is 8.5k. So you can contribute 4.2k “additional.”
So put the 4.2k additional and then add to the roth as well
HSA, triple tax benefit
I would personally choose Roth so I wasn’t tempted to spend the HSA money on a big medical bill, which do tend to come out of nowhere. From a tax perspective, HSA is the better option, if you’re more disciplined