What Happens If You Put Too Much in Your HSA Account?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. But, what happens if you put too much money into your HSA account?

If you contribute more than the allowed limit into your HSA, the excess amount is considered an excess contribution. Here are some things that may happen if you put too much in your HSA account:

• The excess amount is subject to a hefty tax penalty of 6% per year until it's corrected.
• You will need to remove the excess contribution from your HSA to avoid further penalties.
• If you don't correct the excess contribution by the tax filing deadline, the penalty will continue to accrue.

It's important to stay informed about the contribution limits for HSAs to avoid unintentionally over-contributing. Keep track of your contributions throughout the year to ensure you don't exceed the limit.

Health Savings Accounts (HSAs) are an excellent tool for managing healthcare expenses while providing significant tax advantages. However, it's crucial to monitor your contributions closely, as exceeding the allowed limit can lead to unintended financial repercussions.