What is the income threshold for HSA deduction for head of household?

As a head of household, it's essential to understand the income threshold for HSA deduction to maximize your healthcare savings. For tax year 2021, the income threshold for HSA deduction for head of household is $125,000.

Contributing to a Health Savings Account (HSA) allows you to set aside pre-tax income for qualified medical expenses. This means you can save money on taxes while preparing for healthcare costs.

Here are some key points to consider regarding HSA deductions for heads of household:

• The income threshold mentioned above is for tax year 2021. It's important to check for updated thresholds each year.
• For individuals below the income threshold, contributions to an HSA are tax-deductible, providing a valuable tax benefit.
• Contributions made by an employer to your HSA are also excluded from your taxable income, further enhancing your tax savings.
• Unused funds in your HSA roll over year after year, allowing you to build a substantial healthcare fund for the future.

As a head of household, understanding the income threshold for HSA deductions is crucial for effective financial planning. For the tax year 2021, if your income surpasses $125,000, you may face limitations on how much you can contribute to your Health Savings Account (HSA).