IRS Makes Large Increases to Health Savings Account Contribution Limits for 2024

Posted by dreiling on May 25, 2023 in Blog | 0 comments

HSA Max Contributions for 2024 

For 2024, individuals under a high deductible health plan (HDHP) will have an HSA contribution limit of $4,150. The HSA contribution limit for family coverage will be $8,300.

If you are age 55 or older, the catch-up contribution, currently $1,000, still applies for 2024.

I hear from many people the concern of “use it or lose it”. That does not apply to HSAs. That applies to employer cafeteria plans. If you make the maximum contribution amount each year and you do not spend all of the contribution amount in that year, the balance remains and grows each time you make a contribution. Moreover, appreciating funds in HSAs grow tax free. Therefore, if you decide to invest your HSA in an approved market account, any appreciation in value is tax-free.

Contributions to HSA accounts are tax-free contributions. They lower your above-the-line income on your 1040 income tax returns, thereby lowering your AGI, thereby lowering your taxable income. So long as you use funds in your HSA accounts to pay for medical expenses (doctors, hospitals, eye doctors, dentists) and prescription expenses (including Rx, glasses, etc), and other approved expenses for health insurance, those funds are never taxed. If you use your HSA account to pay for over-the-counter medicines like aspirin or vitamins, then the IRS will asses taxes on those distributions from your HSA.

I believe HSAs are one of the most tax-advantageous provisions to be found in the U.S. Tax Code.

Contribution Limits for Health Savings Accounts Under HDHPs for 2023 and 2024.