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Health Savings Account: How much can I contribute to an HSA in 2023?

With Health Savings Accounts (HSAs), you can save money aside tax-free and use it to cover certain medical costs in the United States of America. However, there are restrictions on the amount you can provide each year, as you could be handed a tax penalty if you over contribute.

This means that when you are making HSA contributions you need to keep in mind several guidelines and be must be enrolled in a health plan that is HSA-eligible.

“No permission or authorization from the IRS is necessary to establish an HSA,” reads the IRS official website.

“You set up a HSA with a trustee. A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. The HSA can be established through a trustee that is different from your health plan provider.”

How much can I contribute to an HSA in 2023?

The Internal Revenue Service (IRS) establishes the maximum amount that may be put into an HSA each year. For instance, if your employer pays 1,000 dollars to your HSA and your annual HSA contribution limit is 3,650 dollars, you can only contribute 2,650 dollars unless you qualify for a 1,000 dollar catch-up contribution.

As for 2023, for self-only coverage and family coverage, the HSA contribution maximums are 3,850 dollars and 7,750 dollars, respectively. Those who are over 55 years old can make a catch-up contribution of an extra 1,000 dollars.

“There are some family plans that have deductibles for both the family as a whole and for individual family members,” the IRS adds.

“Under these plans, if you meet the individual deductible for one family member, you don’t have to meet the higher annual deductible amount for the family.

“If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan doesn’t qualify as an HDHP.”

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