How Much Money Can You Contribute to an HSA?

If you have a health savings account (HSA) or are considering opening one, you may wonder about the contribution limits. The amount of money you can contribute to an HSA is set by the IRS each year, and it can change annually. Your contributions are tax-deductible, and the earnings on the account are tax-free if used for qualified medical expenses.

For 2021, the IRS has set the following contribution limits for HSAs:

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

It's essential to note that these limits include both your contributions and any contributions made by your employer. If you are 55 or older, you can make an additional catch-up contribution of $1,000 per year.

Contributions to an HSA can be made by you, your employer, or both, but the total contributions cannot exceed the annual limit set by the IRS. It's crucial to stay within these limits to avoid tax penalties.

When you think about saving for health expenses, a Health Savings Account (HSA) stands out as a valuable option. Knowing how much you can contribute to your HSA each year is crucial to maximize your savings. The IRS determines these contribution limits annually and for the year 2021, they are set at:

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

Both you and your employer can contribute to your HSA, but remember that the total contributions must not surpass these limits to enjoy the full tax benefits. If you're 55 or older, don’t forget to take advantage of the additional catch-up contribution of $1,000 each year!