• by admin
• November 22, 2024

A Health Savings Account (HSA) in the United States allows you to contribute every year from your pretax income, and this fund can be used for your qualified medical expenses. You need to be enrolled in a high-deductible health plan (HDHP) before you can contribute.

• You can enroll in HDHP for yourself or for the family
• Earnings within your HSA is tax-free
• Distribution from HSA is tax-free when used for the qualified medical bills
• You can contribute, or your employer can contribute or both
• Any unused balance in HSA is carried forward to the next year
• The qualified medical expenses is determined as per the IRS guidelines
• You can use your HSA account as your retirement planning along with your 401(k) or IRA accounts

 

One of the conditions for an HSA contribution is that you do not have any medical coverage elsewhere. For example, if an Ontario, Canada resident is covered under the medical coverage under OHIP, he will not be eligible to contribute to HSA in the United States.

 

The following contribution limits apply:

For the tax year 2024 –

HDHP Coverage for self $4,150

HDHP Coverage for family $8,300

For the tax year 2024 –

HDHP Coverage for self $4,300

HDHP Coverage for family $8,550

 

There is a penalty, may apply to you if you over contribute to your annual limit.