How Much Will the IRS Let Me Contribute to an HSA in a Year?

When it comes to contributing to a Health Savings Account (HSA), many people wonder about the maximum amount allowed by the IRS in a year. The IRS sets limits on how much individuals can contribute to an HSA annually, which is adjusted for inflation each year.

For the tax year 2021, the maximum contribution limits set by the IRS for HSAs are as follows:

• For individuals with self-only coverage: $3,600
• For individuals with family coverage: $7,200

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

Contributions to an HSA are tax-deductible, meaning you can reduce your taxable income by the amount you contribute to the account. Any earnings or interest gained on the funds in your HSA are tax-free as long as they are used for qualified medical expenses.

It's important to stay informed about HSA contribution limits as they can change annually. Consulting with a financial advisor or tax professional can also provide you with personalized advice based on your specific situation.

When considering how much you can contribute to your Health Savings Account (HSA), it's crucial to understand the IRS regulations that dictate these amounts. For 2021, the IRS has established contribution limits that offer flexibility for savers, encouraging better healthcare planning.