How Much Annual Contribution to HSA? - Understanding Your Health Savings Account

Health Savings Accounts (HSAs) are a valuable tool for saving money on healthcare expenses, offering a tax-advantaged way to set aside funds for medical costs. One common question people have about HSAs is how much they can contribute annually.

For 2021, the annual contribution limits for HSAs are set by the IRS. The limit for an individual is $3,600, while for a family, it is $7,200. These limits may change each year, so it's essential to stay updated on the current amounts.

Contribution limits are prorated based on the months you are eligible to contribute to an HSA. If you are eligible to contribute for only part of the year, your limit is calculated based on the number of months you were eligible.

It's important to note that individuals who are 55 or older can make catch-up contributions to their HSAs. For 2021, the catch-up contribution limit is an additional $1,000 per year.

Key Points:

• 2021 HSA contribution limit for individuals: $3,600
• 2021 HSA contribution limit for families: $7,200
• Contribution limits are prorated based on eligibility period
• Catch-up contributions of $1,000 per year for those 55 and older

Health Savings Accounts (HSAs) are an excellent way to save for medical expenses while enjoying tax benefits. Understanding how much you can contribute each year is essential to maximizing these benefits.