How Much Can I Contribute to HSA?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while reducing your taxable income. If you're considering opening an HSA, one of the most common questions is, 'How much can I contribute to my HSA?'

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

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

These limits represent the total amount that can be contributed to your HSA for the year, including contributions made by both you and your employer. However, it's important to note that there are also catch-up contributions available for individuals aged 55 and older, allowing them to contribute an additional $1,000 per year.

It's essential to stay within these contribution limits to avoid any penalties or tax implications. If you contribute more than the allowed amount, you may be subject to excise taxes.

Health Savings Accounts (HSAs) are an invaluable tool for managing healthcare costs while also serving as a way to reduce your taxable income. If you're wondering, 'How much can I contribute to my HSA?' you're not alone!

For 2021, the IRS has set the maximum contribution limits to $3,600 for those with individual coverage and $7,200 if you have family coverage. Remember, this total includes contributions from both you and your employer.

Moreover, if you’re aged 55 or older, you can take advantage of catch-up contributions, enabling you to add an extra $1,000 to your account, an excellent way to bolster your savings as you approach retirement.

It's crucial to adhere to these contribution limits to avoid potential fines; an excess contribution could trigger excise taxes, which can cut into your savings.