What Happens When You Withdraw from HSA Employer Contribution Limits 2018?

When it comes to Health Savings Accounts (HSAs), understanding the rules and regulations is essential to making the most of this valuable financial tool. In 2018, the IRS set specific contribution limits for HSAs, especially regarding employer contributions. So, what happens when you withdraw from HSA employer contribution limits in 2018?

Withdrawals from your HSA for qualified medical expenses are tax-free. However, if you exceed the employer contribution limits set for 2018, you may face penalties and tax implications. Here's what you need to know:

• If you withdraw more than the employer contribution limit, the excess amount is subject to income tax.
• Additionally, you may incur a 6% excise tax on the excess contribution amount.
• To avoid penalties, it's crucial to track your contributions and ensure they do not surpass the set limits.

Employer contributions to your HSA are a valuable benefit that can help you save for healthcare expenses. However, it's essential to be aware of the contribution limits to avoid costly mistakes. By staying informed and managing your HSA contributions responsibly, you can make the most of this tax-advantaged account.

Withdrawing funds from your HSA can be a seamless process when you fully understand the withdrawal rules, especially concerning employer contributions that were set in 2018. It’s crucial to stay below the contribution limits to fully benefit from your Health Savings Account.