Recnt Changes to Healthcare Savings Accounts

As you may have heard, the IRS has made a lot of changes to tax laws this year. In fact, it recently issued inflation-adjusted amounts for the annual contribution limits for healthcare savings accounts, as well as for minimum deductible amounts and out of pocket expense amounts for high deductible health plans. 

Under the new laws, anyone who participates in a high deductible health plan is entitled to a deduction for any contributions made to a healthcare savings account.

Under the new rules, the 2019 limit for deductible contributions is $3,500 for single people with self coverage. For families, the limit on deductible contributions is $7,000.

For many people, these increases are great news. In fact, they are so great that they may just encourage others to sign up for a healthcare savings account. However, if you are interested in opening one for yourself, you should be aware that there are some eligibility requirements.
In order to be able to contribute, you must participate in a specialized health plan with an annual deductible over a certain set amount. For the 2019 tax year, that “set amount” is $1,350 for self coverage and $2,700 for family coverage.  

If you are interested in opening one of these accounts for yourself or your family, contact a tax professional. They can help to ensure that you qualify. Plus, they can give you tips and pointers for making the most out of your healthcare savings account.