Skip to main content

The IRS recently released the 2024 key numbers for contribution limits for health savings accounts (HSAs), as well as the 2024 minimum deductible and maximum out-of-pocket amounts for high-deductible health plans (HDHPs).

What is an HSA?

An HSA is a tax-advantaged account that enables you to save money to cover healthcare and medical costs that your insurance doesn’t pay. The funds contributed are made with pre-tax dollars if you contribute via payroll deduction or are tax deductible if you make them yourself using after-tax dollars. (HSA contributions and earnings may or may not be subject to state taxes.) Withdrawals used to pay qualified medical expenses are free from federal income tax.

You can establish and contribute to an HSA only if you are enrolled in an HDHP, which offers “catastrophic” health coverage and pays benefits only after you’ve satisfied a high annual deductible. Typically, you will pay much lower premiums with an HDHP than you would with a traditional health plan such as an HMO or PPO.

If HSA withdrawals are not used to pay qualified medical expenses, they are subject to ordinary income tax and a 20 percent penalty. When you reach age 65, you can withdraw money from your HSA for any purpose; such a withdrawal would be subject to income tax if not used for qualified medical expenses, but not the 20 percent penalty.

What’s changed for 2024 contribution limits for health savings accounts?

Here are the updated key tax numbers relating to HSAs for 2023 and 2024.

 

Chart information: Health Savings Accounts Annual contribution limit Self-only coverage 2023 $3,850 2024 $4,150 Family coverage 2023 $7,750 2024 $8,300 High-deductible health plan: self-only coverage Annual deductible: minimum 2023 $1,500 2024 $1,600 Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed 2023 $7,500 2024 $8,050 High-deductible health plan: family coverage Annual deductible: minimum 2023 $3,000 2024 $3,200 Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed 2023 $15,000 2024 $16,100 Catch-up contributions Article title:Healthcare Savings Account Numbers for 2023-2024

Scarlet Oak Financial Services can be reached at 800.871.1219 or contact us here.  Click here to sign up for our weekly newsletter with the latest economic news.

Source:

Broadridge Investor Communication Solutions, Inc. prepared this material for use by Scarlet Oak Financial Services.

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on individual circumstances. Scarlet Oak Financial Services provide these materials for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.