How Can You Contribute to an HSA?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. One of the key aspects of an HSA is making contributions to build up your savings over time.

Here’s how you can contribute to an HSA:

• Contributions from an employer: If your employer offers to contribute to your HSA, take advantage of this benefit. Employer contributions are tax-free and can help boost your savings.
• Personal contributions: You can make contributions to your HSA from your own funds. These contributions are tax-deductible, which means you can lower your taxable income while saving for healthcare expenses.
• Spousal contributions: If you have a spouse who is also covered under a high-deductible health plan, you can make contributions to a joint HSA account.
• Catch-up contributions: Individuals aged 55 and older can make additional catch-up contributions to their HSA to further enhance their savings.

It’s important to be aware of the contribution limits set by the IRS for HSAs. For 2021, the contribution limit for individuals is $3,600 and $7,200 for families.

Health Savings Accounts (HSAs) are not just a great way to save for medical expenses; they are also a strategic financial tool that offers significant tax advantages. Contributing to an HSA allows you to build your healthcare savings while enjoying tax-free growth on your investments.

Here’s how you can add to your HSA:

• Employer Contributions: Many employers contribute to HSAs as part of their benefits package. These contributions are not subject to taxes and can significantly enhance your savings for medical expenses.
• Personal Contributions: You can directly deposit funds into your HSA. These personal contributions are tax-deductible, which lowers your taxable income while helping you save for healthcare costs down the line.
• Contributions from Your Spouse: If you and your spouse are both enrolled in a high-deductible health plan, consider setting up a joint HSA. This can maximize your contributions and overall savings.
• Catch-Up Contributions: If you're 55 or older, the IRS allows you to make additional catch-up contributions—ideal for those looking to expedite their health savings as they approach retirement.

Remember, the IRS has established contribution limits for HSAs, which are important to keep in mind when planning your savings. For 2021, individuals can contribute up to $3,600 and families can contribute up to $7,200.