Rising Inflation Brings Higher HSA Contribution Limits in 2024 by Rick D. Bazzani, CPA
Posted on July 11, 2023
by
Rick Bazzani
Participants in high-deductible health plans will be able to contribute a significantly higher amount to their health savings accounts (HSAs) in 2024 to cover out-of-pocket medical expenses.
The IRS raised the HSA contribution limits for 2024 to $4,150 for individuals and $8,300 for families (up from $3,850 and $7,750, respectively, in 2023.) HSA owners aged 55 and older by Dec. 31, 2024, can make an additional “catch-up” contribution of $1,000.
HSAs offer owners triple-tax benefits. This includes:
- Tax-Free Contributions. Employees make contributions with pre-tax dollars, meaning those amounts are excluded from their taxable income. This also applies to amounts contributed by employers.
- Tax-Free Earnings. Contributions are invested where they can earn interest and grow free of any tax implications.
- Tax-Free Withdrawals. Account owners can withdraw funds tax-free when used to pay for a long list of qualifying healthcare expenses, including
To be eligible for an HSA, individuals must meet the following requirements:
- Covered under a high-deductible health plan
- Lacking other health coverage (some exceptions apply)
- Not enrolled in Medicare
- Not claimed as a dependent on someone else’s income tax return.
About the Author: Rick D. Bazzani, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where he provides individuals and entrepreneurs with a broad range of tax-efficient estate, trust and gift-planning services. He can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or info@bpbcpa.com.
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