What is the Maximum Annual Contribution on an HSA Account?

If you are considering opening a Health Savings Account (HSA) or already have one, you might be wondering what the maximum annual contribution limit is. The maximum annual contribution on an HSA account is set by the IRS and can vary depending on whether you have self-only coverage or family coverage.

For individuals with self-only coverage, the maximum annual contribution limit for 2021 is $3,600. If you have family coverage, the maximum annual contribution limit is $7,200 for 2021. These limits are subject to change each year due to inflation adjustments.

It's important to note that there are catch-up contributions available for individuals aged 55 and older. For those eligible, an additional $1,000 can be contributed annually.

Contributions to an HSA are tax-deductible, meaning you can lower your taxable income by contributing to your HSA. Additionally, funds in an HSA can be invested and grow tax-free, as long as they are used for qualified medical expenses.

Understanding how much you can contribute to your Health Savings Account (HSA) each year is crucial for anyone looking to take advantage of its tax benefits. For the tax year 2021, if you have self-only health coverage, the maximum contribution limit is set at $3,600. Meanwhile, for those with family coverage, it's $7,200. Remember that these limits adjust annually to account for inflation, so it's worth keeping an eye on them!