It's tax season: Did you maximize your 2021 HSA tax deductions? Skip to content

It's tax season: Did you maximize your 2021 HSA tax deductions?

This year the 2021 tax filing deadline is April 18, 2022. That means you have a few extra days to make a last-minute contribution to your Health Savings Account (HSA) to potentially reduce your annual tax bill.You're allowed to make 2021 HSA contributions right up to the tax filing deadline.

How much will you save? Every dollar you add to your HSA reduces your taxable income by one dollar. It's a straight dollar-for-dollar deduction. So, if your effective tax rate is 25 percent, you'll save a quarter for every dollar you set aside.

Those quarters can add up fast! Plus, the dollars your save in your HSA will be there if you need them for qualified medical expenses (or long-term retirement savings).3

How much can I contribute?

For the 2021 tax year, the Internal Revenue Service (IRS) statutory HSA contribution limits are:

  • $3,600 for individual health plans
  • $7,200 for family health plans

That means if you're enrolled in a family high-deductible health plan, and contribute the maximum allowed, you could claim up to a $7,200 in tax deduction.

If you're 55 or older, you're allowed to contribute an additional $1,000 catch-up contribution beyond standard IRS limits. This opportunity to contribute an extra $1,000 applies the same regardless of whether you're enrolled in a family plan or individual plan.


Am I eligible?

In order to make tax-deductible HSA contributions, be sure your 2021 health plan qualifies as an HSA-qualified or high-deductible health plan under IRS rules. Otherwise, contributions could be subject to a tax penalty.

In addition, make sure you don't over contribute. Contributions beyond IRS limits could also incur additional tax penalties.

Is there a catch?

No catch. Money you put in your HSA is your money to keep-even if you change employers or health plans. There's no "use it or lose it" like with a Flexible Spending Account (FSA).

HSA funds are there for you to spend as you need and save if you don't. And, any dollars you don't spend carry over year after year. Medical expenses tend to only increase as we get older, so setting funds aside now makes sense.


How do I make a tax-deductible contribution?

You can log into your HealthEquity account and initiate an EFT transfer with your linked bank account. If you haven't linked a bank account yet, you'll have to do that first. Then, just select the amount you'd like to contribute and the money will automatically be drawn from your checking account into your HSA.


How do I report the HSA tax deduction on my taxes?

HealthEquity will report your total 2021 HSA contributions on IRS Form 5498-SA, which will be sent to you. Then, you can report your tax-deductible HSA contributions on Form 8889 (these are the contributions you've made with after-tax money via bank transfer-not through payroll deductions). From there just list your total contributions on Form 1040 (this will include your after-tax contributions plus the HSA contributions taken out of your paycheck in 2021). Check out this helpful post on the tax forms mentioned.


How do I get started?

Log into your HealthEquity account and make a tax-deductible contribution right now.

As you file, our site has plenty of additional resources to support you. You can reference FAQs at the bottom of our HSA tax center page. The help center is also a good source for informative guides and answers to common questions. Others forms you may need are available in the documents and forms section. And, you can always access The Complete HSA Guidebook to help you make informed decisions and take control of your health and wealth.


1 HSAs are never taxed at a federal income tax level when used appropriately for qualified medical expenses. Also, most states recognize HSA funds as tax-deductible with very few exceptions. Please consult a tax advisor regarding your state's specific rules.

2 The example used is for illustrative purposes only. Your savings will vary based on your combined state and federal effective tax rate and your specific tax situation.

3 After age 65, if you withdraw funds for any purpose other than qualified medical expenses, you will be subject to income taxes. Funds withdrawn for qualified medical expenses will remain tax-free.

HealthEquity does not provide legal, tax or financial advice. Always consult a professional when making life-changing decisions. 

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