If you are eligible for health savings account contributions, you can deposit more money from 2023 onwards thanks to an IRS inflation adjustment.
In 2023, you can save up to $ 3,850 with an individual health insurance plan, up from $ 3,650 in 2022, the IRS announced Friday. And you can soon contribute up to $ 7,750 with a family plan, boosted from $ 7,300.
To qualify, you must have qualified high-deductible health insurance with an annual deduction of at least $ 1,500 for coverage alone or $ 3,000 for family plans.
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If you are eligible to contribute, health savings accounts can offer a few unique tax benefits.
You can score a so-called “above the line” depreciation for contributions, which lowers your adjusted gross income, regardless of whether you specify deductions.
There is also a chance to invest your balance and increase the money tax free. You can use the money at any time, tax and penalty free, for eligible medical expenses.
What’s more, there are no “use-it-or-lose-it” rules, which means your balance can continue to grow and your account is portable if you change jobs.