How Much Can You Put in an HSA Per Year?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. One common question that comes up when considering an HSA is, 'how much can you put in an HSA per year?'

For 2021, the annual contribution limits for HSAs are:

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

These limits include both your contributions and any contributions made by your employer. It's important to note that these limits are set by the IRS and can change each year.

Additional key points to consider about HSA contributions:

• Contributions are tax-deductible, meaning you can reduce your taxable income by contributing to an HSA.
• For individuals age 55 and older, there is a catch-up contribution of $1,000 per year.
• If you have a high-deductible health plan (HDHP) and are eligible for an HSA, you can contribute up to the annual limits mentioned.
• Unused HSA funds roll over year after year, so you never lose your contributions.

Health Savings Accounts (HSAs) are a fantastic investment for your health, providing you the flexibility to save for medical expenses while enjoying significant tax benefits. Many ask, 'how much can you contribute to an HSA each year?' which is an important consideration for effective financial planning.

For 2021, the IRS has established the annual contribution limits for HSAs at:

• For individuals: $3,600
• For families: $7,200

These amounts encompass both your own contributions and any made by your employer. It's essential to stay updated, as these limits may adjust from year to year based on IRS regulations.

When contemplating HSA contributions, keep these crucial points in mind:

• Your contributions are tax-deductible, allowing you to lower your taxable income significantly by setting funds aside in your HSA.
• If you're aged 55 or above, you get the advantage of a catch-up contribution, allowing you to add an extra $1,000 to your annual contributions.
• Participants with a high-deductible health plan (HDHP) qualify to contribute up to these specified annual limits.
• You’ll also appreciate that any unused HSA funds can roll over indefinitely, meaning your contributions can grow untouched until you decide to use them.