How Much Can You Put into a HSA? - Understanding HSA Contribution Limits

If you have a Health Savings Account (HSA) or are considering opening one, you may be wondering how much you can contribute to it each year. Let's dive into the details to help you understand the maximum allowable contributions to an HSA.

Each year, the IRS sets limits on the amount you can contribute to your HSA. These limits are based on whether you have self-only or family coverage under a High Deductible Health Plan (HDHP).

For 2021, the contribution limits are as follows:

• Self-only coverage: $3,600
• Family coverage: $7,200

It's important to note that these limits are for individuals under the age of 55. If you are 55 or older, you are eligible to make an additional catch-up contribution of $1,000 per year.

Contributions to an HSA are tax-deductible, meaning you can lower your taxable income by contributing to your account. Additionally, funds in an HSA can be invested and grow tax-free, providing a valuable resource for future medical expenses.

Keep in mind that HSA contributions can be made by you, your employer, or both. If both parties contribute, the total amount cannot exceed the annual limits set by the IRS.

By maximizing your contributions to an HSA, you can take advantage of the tax benefits and build a valuable financial resource for healthcare expenses in the future.

If you've recently embarked on the journey of managing your health expenses and have a Health Savings Account (HSA) or are thinking about one, understanding the annual contribution limits is essential. Let's explore how much you can contribute each year.

Every year, the IRS sets the contribution limits for HSAs, which differ based on whether you have self-only coverage or family coverage under a High Deductible Health Plan (HDHP).

For 2023, the allowable contributions are:

• Self-only coverage: $3,850
• Family coverage: $7,750

Remember, these limits apply to those under 55 years old. If you're 55 or older, you can also take advantage of a catch-up contribution of an extra $1,000 annually.

Contributing to an HSA isn't just helpful for saving for future medical costs; it also provides tax benefits. Your contributions can reduce your taxable income, meaning you'll save more come tax season. Plus, your HSA balance can grow without being taxed, further enhancing your savings for potential healthcare costs.

It's worth noting that contributions to your HSA can come from you, your employer, or both. However, regardless of who contributes, the total cannot exceed the IRS set limits.

By maximizing your contributions, you not only take full advantage of HSA tax benefits, but you also create a strong financial cushion for any healthcare expenses that arise down the line.