Health Savings Account Contribution Deadline is Quickly Approaching
With the tax filing deadline just around the corner, many people are working quickly to finalize their taxes for the previous year. This deadline also provides an opportunity for those contributing to a health savings account (HSA) to maximize their contributions to the account for the previous tax year.
Each year the IRS determines the maximum amount which can be contributed to an HSA based on the level of insurance coverage the account holder has for the year. While many people contribute throughout the year to their account, it is possible to make contributions up until the tax filing deadline for that year. This allows account holders who may not have contributed as much as possible during the year to deposit any additional funds and still receive the tax perk for that year.
HSAs allow account holders to deposit funds into the account to be used for qualified medical expenses. The account holder does not have to pay taxes on the funds contributed to the account, whether they contribute pre-tax through payroll deductions or make deposits from their own personal bank account. If contributions are made to the account and are not pre-tax payroll deductions, the account holder can take an above the line deduction when filing their taxes.
For more information about contributions to HSAs, please see IRS Publication 969.
BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.