The IRS has raised the HSA contribution limit for self-only coverage to $4,150 in 2024. This is an increase of $50 from the previous year. For those with family coverage, the maximum contribution limit is set at $8,300, up $100 from 2023. Additionally, individuals aged 55 or older can make an extra catch-up contribution of $1,000.
Health savings accounts (HSAs) offer a tax-advantaged way to save for medical expenses. Contributions to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. These accounts are only available to individuals with high-deductible health plans (HDHPs).
The IRS adjusts HSA contribution limits annually to account for inflation. The goal is to help individuals save for future healthcare expenses while providing tax benefits. It's important for HSA holders to stay informed about these changes to maximize their savings potential.
Employer contributions to an HSA count towards the annual contribution limit. This means that if your employer contributes to your HSA, you'll need to factor that into your own contributions to avoid exceeding the limit.
For 2025, the IRS has already announced higher HSA contribution limits. Self-only coverage will have a maximum contribution limit of $4,300, while family coverage will be capped at $8,550. These adjustments reflect the rising cost of healthcare and aim to encourage individuals to save more for their medical needs.
In addition to HSAs, flexible spending accounts (FSAs) also have contribution limits that have increased for 2024. FSAs allow individuals to set aside pre-tax dollars for medical expenses not covered by insurance, such as deductibles and copayments.
The new HSA contribution limits for 2024 present an opportunity for individuals to save more for their healthcare needs. By taking advantage of these tax-advantaged accounts, individuals can better prepare for unexpected medical expenses and secure their financial future.
