The Changes in HSA Contribution Limits are Better for Healthcare Expenses
“Hey Koolaid!” We see you’re still gettin’ your swerve on, bursting through brick walls with drinks for all your neighborhood friends. That explains why they think you’re all that. No objections here, you’ve got flava and you always manage to stay up in the mix. Well, lately we heard that you’ve been stirring up trouble, because you want to be able to make larger contributions to your HSA. In fact, that would be better than a sugar rush.
Okay, Koolaid, you may have a lot of negative healthcare thoughts swishing around in your head, but you’ll be happy to know that the IRS has adjusted for inflation and set new limits for 2018; contribution limits for individual accounts have risen to $3,450 for 2018. Family coverage has risen to $6,900, maximum out-of-pocket is $6,650 for single coverage and $13,300 for family coverage. Oh, yeah!
At Achieve Financial Group we decided to take our own packet of information on the IRS publication for HSA contribution limits and spill some valuable details. We may pour it on thick, but we just don’t want to give you the watered down version:
- The IRS publication has set new minimum deductibles and maximum out-of-pocket expenses for high-deductible health plans, which has to be paired with an HSA.
- Account owners with benefits beyond savings can get multiple tax free advantages, if the money is used for out-of-pocket expenses
- If the money is withdrawn and used on something other than healthcare expenses before the account owner turns 65, there will be a penalty of twenty percent.
- Account owners 55 and older are the only ones authorized to make catch-up contributions.
- Adult children who are at least 26 are not allowed to be covered by the parent if they are not eligible to be claimed as a dependent on the parent’s tax filing.
Ok Big man, do you get the pitcher? We hope you’re no longer seeing red and that you’re Kool with the new IRS limits. So, go ahead and make those contributions. This year your HSA should be much sweeter for you.