The IRS recently announced the largest-ever increase in HSA contributions for 2024. The new amounts are 7% higher than the 2023 amounts. For single high-deductible health plan participants, the maximum contribution towards an HSA for 2024 is $4,150. This is a $300 increase from the 2023 amount of $3,850.
The maximum contribution towards an HSA for 2024 is $8,300 for family coverage under a high-deductible health plan. This is a $550 increase from the 2023 amount of $7,750. The 55+ catch-up amount is unchanged & is still $1,000.
HSAs are a type of savings account that you can use to pay for many health care costs, now & in the future. HSAs offer a triple tax advantage. The contributions are deductible & growth is tax-free. The withdrawals are not taxed as long as they are used for qualified healthcare expenses incurred since the HSA was set up. Qualified healthcare expenses include doctor visits, dental care, acupuncture, medications, and more.
If you have a high-deductible health plan (“HSA-Eligible Plan”) & are not enrolled in Medicare, you are likely eligible for an HSA.
To maximize the benefit of your HSA, consider paying for your medical expenses out of pocket until you turn 65. That way, you can invest your HSA funds & let them grow tax-free. Keep all the receipts for the medical expenses you’ve incurred since opening your HSA. Then, you can withdraw up to that amount tax-free for whatever use in the future.
Do you qualify for an HSA? Talk to us today to see if your specific tax & income situation makes you a good candidate for an HSA. If you already have an HSA, we recommend fully funding it annually.
References
https://www.irs.gov/pub/irs-drop/rp-23-23.pdf
https://www.kiplinger.com/taxes/hsa-contribution-limit-2024
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