What is the Maximum Amount per Year in HSA Tax-Free?

If you are considering opening a Health Savings Account (HSA), it's important to understand the maximum amount you can contribute to it tax-free each year. An HSA is a tax-advantaged account that allows individuals with high-deductible health plans to save for medical expenses.

The maximum amount per year in HSA that you can contribute tax-free is determined by the IRS. For 2021, the maximum contribution limits are $3,600 for individuals and $7,200 for families. These limits are subject to change each year due to inflation adjustments.

Contributing to an HSA can provide individuals with several benefits, including:

• Tax deductions on contributions
• Tax-free growth on investments
• Tax-free withdrawals for qualified medical expenses

It's essential to note that the maximum amounts include both employer and employee contributions. If you are 55 or older, you are also eligible to make catch-up contributions of an additional $1,000 per year.

When exploring the idea of a Health Savings Account (HSA), it's crucial to realize how much you can contribute tax-free each year. For 2021, the IRS set these contribution limits at $3,600 for individuals and $7,200 for families. Don't forget, these limits may rise yearly with inflation adjustments.