HSA Guide
How Much Money Can You Put in Your HSA?
Published October 2, 2023
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Get the app2021 IRS HSA contribution limits explained
Health Savings Accounts (HSAs) are a valuable tool to save for medical expenses while enjoying tax benefits. But how much money can you actually contribute to your HSA?
The IRS sets the annual contribution limits for HSAs, which can vary depending on your type of health insurance coverage. For 2021, the contribution limits are:
- Individual coverage: $3,600
- Family coverage: $7,200
Catch-up contributions for age 55+
Additionally, if you are 55 or older, you are allowed to make an additional catch-up contribution of $1,000 per year.
Health Savings Accounts (HSAs) represent a unique opportunity for individuals to dedicate funds toward medical expenses while simultaneously reaping substantial tax benefits. But how much can you actually add to your HSA each year?
According to the IRS, the annual contribution limits for HSAs are established and may differ based on whether you have individual or family health insurance coverage. For 2021, those limits are set at:
- Individual coverage: $3,600
- Family coverage: $7,200
If you're aged 55 or older, you can take advantage of an additional catch-up contribution of $1,000 annually. This provision is a fantastic way to supercharge your savings as you approach retirement.
Who can contribute and tax benefits
It's important to note that these contributions can be made by you, your employer, or both, but the total contributions cannot exceed the annual limit set by the IRS.
By contributing to your HSA, you can enjoy tax advantages, such as tax-deductible contributions, tax-free growth on your investments, and tax-free withdrawals for qualified medical expenses.
Itâs essential to remember that contributions can come from either you, your employer, or both, but the combined total must not surpass the IRS's annual limit.
Taking full advantage of your HSA can lead to numerous tax advantages, including tax-deductible contributions, tax-free growth on investments, and tax-exempt withdrawals for qualified medical expenses. Maxing out your contributions can help secure your financial health now and in the future.