VisualCalc’s HSA Contribution Calculator helps consumers figure out their maximum allowable HSA contribution.
A health savings account (HSA) is a tax-advantaged medical savings account available to U.S. tax payers who are enrolled in a high-deductible health plan (HDHP). You can almost think of a HSA as a retirement fund for your medical expenses.
A HSA offers a triple benefit in terms of tax savings:
Contributions are tax-deductible
Invested money grows tax-deferred
Withdrawals can be used tax- and penalty-free for out of pocket medical expenses in any year
Unlike a flexible spending account (FSA), which it is often confused with, funds in a HSA roll over year-to-year, and can be used any time (i.e., no deadline).
Funds in a HSA can be used for a number of qualified medical expenses, including deductibles; co-payments; Medicare Part B, Part D, and Advantage premiums; and other expenses not covered by your health plan, such as dental, vision and chiropractic care.
There are some stipulations regarding eligibility and contributions that that are updated each year.
For 2020, these stipulations are:
Your high-deductible health plan (HDHP) must have a deductible of at least $1,400 for individual plans or $2,800 for family plans.
The maximum out-of-pocket expense for your HDHP must be $6,900 for individual plans and $13,800 for family plans.
You can contribute up to $3,550 per year for individual plans and $7,100 per year for family plans.
Once you sign up for Medicare, you can no longer make contributions to your HSA, but you can use funds already invested in your HSA at any time after that tax- and penalty-free.
One key question consumers will want answered is how much they are allowed to contribute to their HSA each year. VisualCalc’s HSA Contribution Calculator will help them determine their maximum allowable HSA contribution. It will also show them, based on their tax bracket, how much their tax savings will be, and what their effective contribution is factoring in their tax savings.
