What is the limit on HSA contributions?

If you're considering opening a Health Savings Account (HSA) or already have one, you may wonder what the limit on HSA contributions is. It's essential to understand how much you can contribute to your HSA to make the most of this tax-advantaged savings tool.

The limit on HSA contributions varies each year and is set by the IRS. For 2021, the annual contribution limit for individuals with self-only HDHP (High Deductible Health Plan) coverage is $3,600. If you have family HDHP coverage, the limit is $7,200. These limits include both your contributions and any employer contributions to your HSA.

It's important to note that if you're 55 or older, you can contribute an additional $1,000 as a catch-up contribution. This means individuals with self-only coverage can contribute up to $4,600, and those with family coverage can contribute up to $8,200.

Contributions to your HSA can be made by you, your employer, or both. However, the total contributions cannot exceed the annual limits set by the IRS. It's crucial to stay within these limits to avoid any potential tax penalties.

If you're considering a Health Savings Account (HSA), understanding the contribution limits is crucial for maximizing your savings and tax advantages. For the year 2021, the IRS has set the annual contribution limits for individuals with self-only coverage at $3,600 and for families at $7,200, combining both personal and employer contributions.