What is HSA Contribution Limit? All You Need to Know

If you're considering opening a Health Savings Account (HSA) or already have one, you may be wondering about the contribution limit. The HSA contribution limit is the maximum amount you can deposit into your HSA account each year. It's essential to understand this limit as it impacts your tax benefits and potential savings for healthcare expenses.

For 2021, the HSA contribution limits are as follows:

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

It's crucial to note that these limits can change annually, so it's essential to stay updated on the current limits. Additionally, individuals over the age of 55 can make catch-up contributions to their HSA accounts.

Contributions to your HSA are tax-deductible, meaning they reduce your taxable income for that year. The funds in your HSA can be used for qualified medical expenses, tax-free. This makes an HSA a valuable tool for saving for healthcare costs both now and in the future.

Understanding the Health Savings Account (HSA) contribution limit is crucial for maximizing your tax savings and ensuring sufficient funds for healthcare needs. For 2021, the contribution limits are set at $3,600 for individuals and $7,200 for families.