5 Minute Tax Tip – Health Savings Accounts

Health Savings Accounts (HSAs):  HSAs allow eligible individuals to make deductible contributions that can be withdrawn tax-free later to reimburse the individual for eligible medical expenses. For 2016, the limitation on HSA deductions is $3,350 for an individual with self-only coverage under a High Deductible Health Plan (HDHP) or $6,750 for an individual with family coverage. An HDHP is defined under IRC Sec. 223(c) as a health plan with an annual deductible not less than $1,300 for self-only coverage or $2,600 for family coverage, with annual out-of-pocket expenses (deductibles, copayments, and other amounts, but not premiums) not exceeding $6,550 for self-only coverage or $13,100 for family coverage. Rev. Proc. 2015-30, 2015-20 IRB .