Save $242 on your Montana income tax by opening a Montana Medical Savings Account before Dec. 31!
Montana Medical Savings Accounts (MSAs) can provide tax savings of $242 for the 2018 tax year. This tax savings is used by 1.4 percent of Montana citizens.
Marsha Goetting, of the Montana State University Extension Service, explains one can deposit up to $3,500 in a MSA, and withdraw money for medical premiums and expenses I had this year that were not covered by health insurance policies. Until Dec. 31, open a separate MSA checking account, depositing money for this year.
If all the money is not used this year, the rest remains in the account and earns interest tax-free. The balance can be used in future years for medical premiums and expenses not covered by health insurance. The MSA applies separately from Federal Health Savings Account (HSA) or Federal Flexible Spending Plan (FSA).
The amount eligible to reduce Montana income is the total deposited, not the amount used. If $500 of the $3,500 is used for eligible medical expenses during 2018, I can still reduce my income by $3,500, not $500. The remaining $3,000 is available for paying medical expenses in future years.