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QFHD - Tax Free Qualified HSA Funding Distribution

#1
I ran across something that I find interesting.  I believe we would use it when we get to that point.... 

In your lifetime, you are allowed to make ONE tax-free distribution from the PRE-TAX dollars in your Traditional IRA in order to fund or add to your HSA account.  You don't pay any taxes on the distribution from the Traditional IRA when your custodian transfers it to your HSA and yet, after you add it to an HSA , it (and all the eventual earnings) can be withdrawn tax-free to pay qualified medical expenses. Some restrictions apply. See:

HSA Rules For Employer Contributions


The distribution counts as part of the annual contributions to an HSA.  Seems like a win-win.  What do you think?
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#2
In most situations, I think this is a poor idea.
 
Assuming that you have some ordinary taxable income, and that you have some cash other than the IRA to fund your HSA, it is better to use that cash.
 
Here's a comparison.   Let's say you're looking at putting $3K into the HSA, you have $10K in a taxable account, $50K in your IRA.
 
1.  Fund HSA with IRA
    - The IRA now has $47K
    - The taxable account still has $10K
    - The HSA has $3K and you've got your original tax bill (you haven't reduced your ordinary income subject to tax).
 
2.  Fund HSA with money from your taxable account
    - The IRA still has $50K
    - The taxable account has $7K
    - The HSA has $3K and your taxable income is $3K lower (you're able to deduct the HSA contribution from your income).
 
In #2, you've got an extra $3K in the IRA that you'll owe taxes on eventually, but in the meantime you've been able to take a $3K deduction right now.
 
In #2, by contributing from a taxable account, you've increased the amount of money you've got tax-sheltered (between the IRA and the HSA).   In #1, you've shifted money from one tax-sheltered account (the IRA) to another (the HSA), but you haven't increased the total amount of money sheltered.
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#3
   While you have earned income it is clearly best to make the annual HSA contributions via payroll deduction because it then bypasses SS/fica, medicare, and income taxation. (HSA Rules For Employer Contributions)
     I thought you normally had to have earned income to contribute to an HSA.  I found out I was wrong.  There is no requirement to have earned income in order to contribution to an HSA.  When one retires, I didn't think you could make HSA contributions any more.  I know that once you are 65 years old and have turned on any SS you can no longer contribute to an HSA. 
     I believe having any SS benefit after you are 65 automatically turns on medicare part A which means you can no longer make "normal" contributions to an HSA.  This type of direct IRA->HSA conversion of one year's worth of HSA contribution might be be allowed even past 65 if claiming SS but I don't know.   
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