How Much Are You Allowed to Contribute to an HSA?

If you have a Health Savings Account (HSA) or are considering opening one, you may be wondering how much you are allowed to contribute. An HSA is a tax-advantaged account that allows individuals to save money for medical expenses, both now and in the future. It offers a great way to save for healthcare costs while enjoying tax benefits.

The contribution limits for HSAs are set by the IRS each year. For 2021, the annual contribution limits are:

• Individual coverage: $3,600
• Family coverage: $7,200

Additionally, if you are 55 or older, you are allowed to make an extra $1,000 'catch-up' contribution.

It's important to note that these contribution limits are subject to change, so it's a good idea to stay informed about any updates from the IRS.

By contributing to an HSA, you can enjoy tax advantages, such as:

• Contributions are tax-deductible
• Interest and investment earnings grow tax-free
• Withdrawals for qualified medical expenses are tax-free

Overall, an HSA can be a valuable tool for managing healthcare costs and saving for the future. Be sure to take advantage of the tax benefits and make contributions within the limits set by the IRS.

If you're looking into a Health Savings Account (HSA), it's crucial to understand just how much you can contribute each year. By managing your contributions effectively, you can maximize the benefits of this tax-advantaged account.