Which of the Following Statements Regarding Health Savings Accounts Is

question 55

Multiple Choice

Which of the following statements regarding Health Savings Accounts is incorrect?

• A)Taxpayers are allowed to deduct contributions to a health savings account for AGI.
• B)All taxpayers are eligible to establish a health savings account.
• C)Distributions from a health savings account are excluded from gross income if used to pay qualified medical expenses.
• D)Health savings account contributions are limited to the lesser of 100% of annual deductible under a high-deductible health plan or $3,400 for taxpayers without family coverage.

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Definitions:

Domestic Opportunity Cost

The cost of forgoing the next best alternative use of a country's own resources.

Comparative Advantage

The principle that countries or entities should produce goods and services where they have a lower opportunity cost compared to others.

Domestic Opportunity Cost

The cost of forgoing the next best alternative when choosing to produce a good or service domestically.