The IRS has announced the 2015 deduction limits for annual contributions to health savings accounts (HSAs). These deduction limits are updated annually to account for inflation.
An HSA is like a medical IRA. You establish an HSA account with a health insurance company, bank, or other financial institution. In case you or a family member gets sick, you must also obtain an HSA-qualified health insurance policy with a high deductible.
Your contributions to your HSA account are tax deductible, and you don’t have to pay tax on the interest or other money you earn on the money in your account. You can withdraw the money in your HSA to pay almost any kind of health-related expense, and you don’t have to pay any tax on these withdrawals.
For calendar year 2015, if you have individual coverage, the maximum you may contribute to your HSA is $3,350. This is $50 more than in 2014. If you have family coverage, the maximum contribution in 2015 is $6,650—a $100 increase over 2014. In addition, individuals who are 55 to 65 years old can make optional tax-free catch-up contributions to their HSA accounts of up to $1,000 each year.
A key feature of an HSA-qualified health plan is that it must have a relatively high annual deductible (the amount you must pay out of your own pocket before your insurance kicks in). In 2015, the minimum annual deductible for a single person will be $1,300, and $2,600 for families. The maximum permissible annual deductible will be $6,450 for individuals and $12,900 for family coverage. (Revenue Procedure 2014-30.)