What is the Maximum Amount that Can Be Deposited in an HSA in a Year?

Health Savings Accounts (HSAs) have become increasingly popular in recent years as a way for individuals to save for medical expenses while enjoying tax benefits. One common question that arises among HSA account holders is, 'what is the maximum amount that can be deposited in an HSA in a year?'

The maximum amount that can be deposited in an HSA in a year is set by the IRS and may vary from year to year. For 2021, the maximum annual contribution limits for HSAs are as follows:

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

It's important to note that individuals who are 55 or older are allowed to make an additional 'catch-up' contribution of $1,000 per year. This means that the total maximum contribution for those individuals would be $4,600 for individual coverage and $8,200 for family coverage.

Contributions to an HSA can be made by the account holder, the account holder's employer, or both. The total contributions made in a year, including any contributions made by the employer, cannot exceed the maximum annual contribution limit set by the IRS.

HSAs offer a triple tax advantage, allowing contributions to be made on a pre-tax or tax-deductible basis, earnings to grow tax-free, and withdrawals to be tax-free when used for qualified medical expenses. This makes HSAs a valuable tool for individuals looking to save for healthcare costs both now and in the future.

Health Savings Accounts (HSAs) have surged in popularity due to their ability to help individuals save for medical expenses while enjoying incredible tax benefits. One frequently asked question by potential or existing HSA account holders is, 'what is the maximum amount that can be deposited in an HSA in a year?'