Understanding the Difference Between Individual and Family Contributions to HSA

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. When it comes to contributing to an HSA, individuals and families have different limits and considerations to keep in mind.

Individual Contributions:

• For individuals, the contribution limit in 2021 is $3,600.
• Individuals aged 55 or older can make an additional catch-up contribution of $1,000.

Family Contributions:

• For families, the contribution limit in 2021 is $7,200.
• Only one HSA is required for a family, and contributions can be made by either or both spouses.

Key Differences:

• Individual limits are lower than family limits.
• Family contributions can be made from one or both spouses' accounts.
• Both individual and family contributions provide tax advantages.

Health Savings Accounts (HSAs) are an incredible tool for saving money on medical expenses while also receiving tax perks. For those looking to contribute to an HSA, it's important to recognize the differences between individual and family contributions, especially as these limits vary significantly.