Supply: The School Investor
The HSA Contribution Restrict for 2024 is $4,150 for self-only, and $8,300 for households. However that is not the one HSA guidelines it’s essential to know.
Well being Financial savings Accounts (HSAs) are tax-advantaged particular person financial savings accounts designed particularly to pay for the medical bills of people who’re enrolled in high-deductible well being plans (HDHPs).
So long as HSA funds are used to pay for certified medical bills, account homeowners is not going to pay earnings tax on the quantity withdrawn.
The funds in these accounts are just like any regular funding account, with the account proprietor absolutely proudly owning all contributions, even when they’re made by an employer, and having the ability to make investments the funds into varied funding choices the monetary custodian gives, which is able to usually be a variety of mutual or index funds.
If you do not have an HSA but, take a look at our checklist of the Greatest Locations To Open An HSA Account.
Excessive Deductible Well being Plans
Excessive-deductible well being plans provide decrease premiums than conventional medical health insurance plans, with the trade-off being a lot greater deductibles (the quantity that the insured particular person should pay earlier than the insurance coverage firm will start overlaying half or all the value of the medical therapy or merchandise) than conventional medical health insurance plans.
For 2024, the well being plan deductible will rise to $1,600 for self-only, and $3,200 for households. The utmost out of pocket most additionally rises as a consequence of inflation, to $8,050 for self protection, and $16,100 for household protection.
For 2025, the well being plan deductible will rise to $1,650 for self-only, and $3,300 for households. The utmost out of pocket most additionally rises as a consequence of inflation, to $8,300 for self protection, and $16,600 for household protection.
These limits apply to the plan’s in-network prices; there are not any particular limits outlined for out-of-network prices and protection.
The Triple Tax Benefit Of HSAs
Contributions to HSAs are tax-advantaged at three ranges:
1.) The quantity of the contribution is tax-deferred, which means it’s deducted as an adjustment on web page one of many account proprietor’s earnings tax return and never topic to earnings tax till it’s withdrawn
2) Withdrawals used for certified medical bills are by no means taxed,
3) Funding positive aspects inside the account are additionally by no means taxed, so long as they’re additionally used for certified medical bills.
These are three highly effective advantages that exceed the benefits supplied by many different tax-advantaged accounts.
These tax benefits are why we name the HSA the Secret IRA!
HSA Contribution Deadline
You will need to contribute to your well being financial savings account by the tax submitting deadline for the 12 months by which you are making your HSA contribution.
Listed below are some deadlines:
- 2024 HSA Contribution Deadline: April 15, 2025
- 2025 HSA Contribution Deadline: April 15, 2026
2024 HSA Contribution Limits
The IRS introduced that they’re considerably rising the HSA contribution limits for 2024 as a consequence of inflation. You’ll be able to learn the official announcement right here.
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Self-Solely: $4,150 Household: $8,300 |
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Catch up contribution (Age 55 and up) |
Supply: The School Investor
There are not any earnings limits to be eligible to contribute to an HSA though you do have to enroll by means of your employer and have a high-deductible medical health insurance plan to be able to qualify.
Contributions are additionally 100% tax deductible in any respect earnings ranges.
2025 HSA Contribution Limits
The IRS introduced the next HSA contribution limits for 2025:
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Self-Solely: $4,300 Household: $8,550 |
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Catch up contribution (Age 55 and up) |
Supply: The School Investor
Prior Years HSA Contribution Limits
Should you’re in search of previous years well being financial savings account contribution limits, take a look at the drop-down packing containers under and discover your 12 months:
Here are the HSA contribution limits for 2023:
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Self-Only: $3,850 Family: $7,750 |
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Catch up contribution (Age 55 and up) |
Here are the HSA contribution limits for 2022:
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Self-Only: $3,650 Family: $7,300 |
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Catch up contribution (Age 55 and up) |
Here are the HSA Contribution limits for 2021:
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Self-Only: $3,600 Family: $7,200 |
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Catch up contribution (Age 55 and up) |
Here are the HSA contribution limits for 2020:
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Self-Only: $3,550 Family: $7,100 |
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Catch up contribution (Age 55 and up) |
Here are the HSA contribution limits for 2019:
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Self-Only: $3,500 Family: $7,000 |
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Catch up contribution (Age 55 and up) |
Final Thoughts
For those who are already using an HDHP and expect to have a significant amount of qualified medical expenses, the benefits of avoiding income tax on these expenses far outweighs to effort to set up an HSA and incur the annual management fees that the financial custodian may charge.
Combined with the fact that there are no income limits or phase-outs to qualifying for HSAs, this can be a valuable tax-advantaged strategy for anyone with an HDHP.
Are you eligible to contribute to an HSA? If so, are you taking advantage of the triple tax advantage?
