HSA (Health Savings Account) Contribution Limits

Healthy Family

Healthy Family with Health Savings Account

Times are tough financially, but you still want to make sure you can take care of your family’s health and well being. This is where a Health Savings Account (or an HSA) can really help.

However, there are IRS contribution limits for HSA funds. You need to make sure you are aware of these so that you can get the most benefit from an HSA.

We are going to take a look at some of the basics concerning a Health Savings Account, including whether you should take advantage of an HSA to help keep your family healthy and happy.

Benefits of an HSA

  • Many Uses – There are quite a few ways you can legally use your Health Savings Account funds during the course of a year – and still deduct up to the HSA limits on your taxes at the end of the year.
  • Extra Security – The extra layer of financial protection that an HSA can provide can really help to give you peace of mind. In these trying economic times, getting everything you can out of every single dollar you earn is important. This is where an HSA can really benefit you and your family.
  • Tax Deductible – In many cases, you will be able to deduct your HSA from your gross earnings – up to a limit, of course. The amount you can deduct has gone up for 2012, meaning HSA contribution limits may not be as big of a problem for you.
  • No Taxes – When the money in an HSA is used for qualified medical expenses, you will not have to pay taxes on the money that is spent. This can add up to quite a bit of savings every year. Paying for health care is expensive, but a Health Savings Account can really help.
  • Rollover – If you do not use the funds in your HSA, the money will still be there for the next year. This will be in addition to the new funds that you put into your Health Savings Account. This is one of the reasons that so many people are using an HSA to benefit their family.
  • Premiums – Certain qualified long-term premiums may be covered by funds in your HSA. This can take a lot of pressure off you and your family if there is someone who needs full time health care. Do not let the cost of taking care of a family member stand in your way of doing what needs to be done. A Health Savings Account may be the answer you have been seeking.

As you can see, there are quite a few ways in which an HSA can benefit you and your family. When it comes to health care, having a plan in place is very important. A Health Savings Account can supplement your existing health insurance, giving you even more protection and help should something happen. When a medical emergency or an injury happens, having the money for health care in a special savings account that is tax deductible makes a lot of sense.

HSA: Are You Eligible?

Here are some of the requirements you will need to meet to start an HSA.

  • You must be currently covered by a high deductible health insurance plan
  • You must NOT be covered under any other health insurance
  • You must NOT be enrolled in Medicare
  • You must NOT be another person’s dependent (for health purposes)

As you can see, the requirements for getting a Health Savings Account are not that difficult to meet. If you are already concerned about your family’s health, there is a good chance you are going to be eligible to get an HSA and really help your family. At the same time, you will be able to deduct the money from your HSA on your taxes.

2012 HSA Contribution Limits

The IRS just issued the 2012 contribution limits and they are higher than in 2011.

  • For individual plans, the HSA contribution limit is $3,100.
  • For family plans, the HSA contribution limit is $6,250.

HSA Contribution Limits Since 2004

Year Contribution Limit
(Single)
Contribution Limit
(Family)
Additional Catch-Up Contribution
(55 or older) (Single and Family)
2012 $3,100 $6,250 $1000
2011 $3,050 $6,150 $1000
2010 $3,050 $6,150 $1000
2009 $3,000 $5,950 $1000
2008 $2,900 $5,800 $900
2007 $2,850 $5,650 $800
2006 $2,700 $5,450 $700
2005 $2,650 $5,250 $600
2004 $2,600 $5,150 $500

 

HSA Contribution Limits FAQ

When it comes to a Health Savings Account, we know that you may have a lot of questions. This is why we have compiled a list of frequently asked questions about HSA funds, including how they can be used throughout the year and the HSA contribution limits for the IRS as well. Keep reading if you want to learn more about the limits for HSA contributions.

What is a Health Savings Account?

An HSA is simply a  savings account that comes with tax benefits. It was created to help for paying medical expenses. In general, a Health Savings Account is …

  • Tax-deductible
  • Tax-free
  • Tax-deferred

The HSA money is yours to use in a variety of ways – including long term care premiums in some cases.

 

Why are there HSA contribution limits?

While it would be nice to be able to contribute as much as you want to a Health Savings Account and enjoy the tax benefits, to be fair to everyone involved (and help the federal government), there are limits on HSA contributions. Having said that, the limits do change. They have been raised again for 2012.

Do the HSA contribution limits change every year?

As mentioned, HSA contribution limits in the eyes of the IRS do change. Sometimes they will stay the same, but occasionally they will be raised. In 2012, the HSA contribution limits for single individuals and families were both increased quite a bit, making it easier to save money for health care.

Is a Health Savings Account a good idea for my family – even with the contribution limits?

While the answer to this question is going to vary from family to family, an HSA may be a big benefit to your family. Even with a cap on the amount you can contribute and take off your taxes, you may want to keep a little more money stocked in your HSA. Times are tough financially, and you never know when you may need a little extra money. Additionally, the fact that the money rolls over from year to year and is not lost means that you can stockpile the HSA funds to be used in the future if you should ever need them.

 

There are other questions about HSA contribution limits, of course. Keep browsing our site to learn more about Health Savings Account IRS contribution limits as well as other ways you can make the most of your money when it comes to health care. If you want to take care of your family, you need to make sure that you have enough money set aside to pay for health care. If you can get a tax deduction for the money you put into an HSA, it makes even more sense to invest at least a little of your income this way.

Also be sure to bookmark our site so that you can check back. We are always adding new information and updating our facts and data so you have the latest info about HSA contribution limits. Ignorance of the law is no excuse. We make it easy to get everything you need to know about limits for contributions to a Health Savings Account.

 

 

Is a Health Savings Account Necessary?

One of the most common questions people have about an HSA is whether a Health Savings Account is really necessary or not. Times are tough for many families financially these days. This is why many have been utilizing an HSA to help out during the year. The fact that you can use it on your taxes at the end of the year is another benefit. There are HSA contribution limits that you need to be aware of, however. Before we go into that, let us take a look at answering the question of whether a Health Savings Account is necessary in the modern world.

  • Health Costs – One of the biggest reasons we think an HSA is necessary is the high cost of health care these days. Even if you have an individual health insurance company, they may not pay all of the expenses. This is where a Health Savings Account can really come in handy. When you set aside money in an HSA, you are going to be able to deduct a certain amount of that money from your taxes each year, which makes your health care even more affordable.
  • Health Emergencies – Above and beyond the expected medical expenses that you are going to have to pay, there are other health emergencies that may come up in your life as well. While you never want these to appear, they do sometimes and you need to be prepared. Having a Health Savings Account can mean you have the money you need for health care set aside for when you need it.
  • Tax Benefits – If you contribute to an HSA, you are going to be able to deduct a certain amount of the money from your taxes every year. Over time, this can add up to quite a bit of savings for a lot of people. The tax deductions and other benefits are just one of the many reasons we think a Health Savings Account is necessary in the modern world.

There are other reasons you should really consider an HSA, but the three we have listed should be enough to get you very interested in finding out if you are eligible to get a Health Savings Account and reap the benefits of having one. Not everyone is eligible for an HSA, but the requirements are not that difficult to meet for most people who have a good job and health insurance.

About 2011 HSA Contribution limits

Note: If you are looking for the current 2012 HSA contribution limits, click here.

If you are curious about how Health Savings Account contribution limits have changed over the years, 2011 was not very interesting. The contribution limits were the same as 2010. They have since changed for 2012, but we are going to take a look at the 2011 HSA contribution limits just to keep a record of what past limits were set at for an HSA.