Your 2024-2025 HSA Expenses: What To Know For Tax Purposes
Did you use your Health Savings Account (HSA) for medical expenses in 2024? Are you getting ready to file your taxes? The Insurance People are here to help! Here, we’ll take you through contribution limits for 2024 and why they matter, how to receive a tax deduction for your HSA, and tips to keep in mind for using your HSA in 2025.
If you utilized an HSA in 2024, then you were able to deposit money, tax-free, directly from your paycheck into your HSA to pay for HSA eligible medical expenses. This means the money that you contributed to your HSA has no penalty going in and no penalty upon withdrawal. As long as you contribute up to the maximum contribution, the amount you contribute can be used as a tax deduction. If you don’t use up to the maximum contribution that you make, the money stays in your account and can accumulate towards the next year’s expenses.
In 2024, the maximum contribution an individual could make to an HSA was $4,150, and the maximum contribution a family could make to an HSA was $8,300. These limits are important, because when it is time to file your 2024 taxes, deductions can only be made up to the maximum contribution amount. The only exception for this is for people aged 55 and older, who can add an additional $1,000 to their HSA account. Otherwise, any amount over the yearly contribution limit will be subject to tax, and not eligible for deduction.
For 2025, the maximum contribution an individual can make to their HSA is $4,300 and the maximum family contribution is $8,550. Again, the rules as previously mentioned for people over 55 apply here, and also, if you have money left over that you did not use in 2024, it will be available for use towards medical expenses this year.
When you file your taxes, you are eligible for a tax deduction up to the maximum contribution amount, or the amount that you used up to it. If you spent more than your HSA maximum, which can happen when you accumulate money that you don’t use, the amount over the contribution limit becomes subject to tax.
When you plan for your medical costs in 2025, become familiar with your HSA maximum contribution limits and determine whether your expenses will exceed the limits. If so, you may be eligible for itemized deductions. Consult your accountant or tax specialist for more information on itemized deductions.
Have additional questions about HSAs? We can help! Contact The Insurance People today.
