Can You Contribute to a Health Savings Account (HSA)?

If you're wondering whether you can contribute to a Health Savings Account (HSA), the short answer is yes! An HSA is a tax-advantaged savings account that you can use to pay for medical expenses tax-free. But there are some specific requirements and limitations you should be aware of.

Here is what you need to know:

• To contribute to an HSA, you must be enrolled in a High Deductible Health Plan (HDHP) and not covered by any other health insurance that is not an HDHP or Medicare.
• For 2021, the annual contribution limit is $3,600 for individuals and $7,200 for families. If you are 55 or older, you can make an additional catch-up contribution of $1,000.
• Contributions to an HSA are tax-deductible, meaning you can reduce your taxable income by the amount you contribute.
• The money in your HSA can be used to pay for qualified medical expenses, including deductibles, copayments, and certain medical services not covered by your insurance.
• HSA funds can also be used for non-medical expenses, but they will be subject to income tax and a 20% penalty if you are under 65 years old.
• Your HSA balance rolls over from year to year, so you don't have to worry about losing any unused funds at the end of the year.

Make sure to consult with a financial advisor or tax professional to fully understand the rules and benefits of contributing to an HSA.

If you're considering contributing to a Health Savings Account (HSA), the great news is that it’s a valuable financial tool for managing your medical expenses! An HSA offers a triple tax advantage: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are also tax-free.