New for 2020, first time homebuyers can establish this tax-advantaged savings account, and deduct contributions and interest earned, up to $15,000 for individuals or $30,000 for couples filing jointly. Withdrawals from the account balance are not taxable when the money is used towards qualified expenses such as down payments or other costs related to purchasing the home. This deduction is specific to Idaho income tax, and account owners cannot have previously owned a home.
This is a trust or custodial account designed solely for paying qualified education expenses for a designated beneficiary account. This benefit applies not only to qualified higher education expenses, but also to qualified elementary and secondary education expenses. Coverdell plans offer tax deferred growth and tax-free withdrawals, provided funds are used for qualifying educations expenses. There's no limit to the number of accounts that can be established for a particular beneficiary; however, the total contribution to all accounts on behalf of a beneficiary in any year cannot exceed $2,000.
Contributions to an MSA account can be applied towards medical expenses while earning interest. Similarly, a Health Savings Accounts (HSA) is another savings account also used for medical expenses, however for this account, the owner typically has a high-deductible health insurance plan. Contributions to both MSA’s and HSA’s can be used to pay qualified medical expenses today, or you can let the money grow and use it in future years. Contributions to an MSA may be eligible for a State of Idaho tax deduction subject to contribution limits. Contributions to an HSA may be eligible for federal tax deductions subject to contribution limits. A Flexible Spending Account (FSA) works similarly to an HSA. Depending on the entity offering the account, an FSA can be set up for a variety of purposes. A Dependent Care FSA for example, is an excellent option for families wanting to save for and pay for childcare.