Saving More in 2021 in Tax Deductible, Tax Free Health Savings Accounts (HSAs)

Saving More in 2021 in Tax Deductible, Tax Free Health Savings Accounts (HSAs)

| May 26, 2020
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IRS raises HSA contribution limits for 2021

The IRS has issued annual inflation-adjusted limits for contributions to health savings accounts permitted to participants in high-deductible health plans. Most amounts have increased slightly from 2020 amounts.

For 2021, the annual limit on deductible contributions is $3,600 for individuals with self-only coverage under an HDHP (a $50 increase from 2020) and $7,200 for family coverage (a $100 increase from 2020).

The limits on annual deductibles are also subject to annual inflation adjustments. For 2021, the lower limit on the annual deductible for an HDHP is $1,400 for self-only coverage and $2,800 for family coverage, both unchanged from 2020. The upper limit for out-of-pocket expenses is $7,000 for self-only coverage and $14,000 for family coverage, both increased from 2020.

If your employer offers High Deductible Health Plans, let us know and we can help you weigh the pros and cons of this type of health insurance and also share insights on the best ways to maximize this opportunity for making tax deductible contributions that grow tax free (if used for qualified medical expenses including Medicare premiums).

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