- How much can I contribute to my HSA each year?
Your annual HSA contribution for 2007 for single coverage cannot exceed $2,850 and for family coverage it cannot exceed $5,650. If you are age 55 or older, you can also make additional "catch-up" contributions (see below).
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- Do my HSA contributions have to be made in equal amounts each month?
No, you can contribute in a lump sum or in any amounts or frequency you wish. However, your account trustee/custodian (bank, credit union, insurer, etc.) can impose minimum deposit and balance requirements.
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- Does my contribution depend on when I establish my HSA account or when my HDHP coverage begins?
Your eligibility to contribute to an HSA is determined by the effective date of your HDHP coverage.
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- Can my employer contribute to my HSA?
Contributions to HSAs can be made by you, your employer, or both. All contributions are aggregated to determine whether you have contributed the maximum allowed. If your employer contributes some of the money, you can make up the difference.
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- Do my contributions provide any tax benefits?
Your personal contributions offer you an "above-the-line" deduction. An "above-the-line" deduction allows you to reduce your taxable income by the amount you contribute to your HSA. You do not have to itemize your deductions to benefit. Contributions can also be made to your HSA by others (e.g., relatives). However, you receive the benefit of the tax deduction.
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- If my employer contributes to my HSA, does that also provide me any tax benefit?
If your employer makes a contribution to your HSA, the contribution is not taxable to you the employee (excluded from income).
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- Can I make contributions through my employer on a "pre-tax" basis?
If your employer offers a "salary reduction" plan (also known as a "Section 125 plan" or "cafeteria plan"), you (the employee) can make contributions to your HSA on a pre-tax basis (i.e., before income taxes and FICA taxes). If you can do so, you cannot also take the "above-the-line" deduction on your personal income taxes.
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- Can I claim both the "above-the-line" deduction for an HSA and the itemized deduction for medical expenses?
You may be able to claim the medical expense deduction even if you contribute to an HSA. However, you cannot include any contribution to the HSA or any distribution from the HSA, including distributions taken for non-medical expenses, in the calculation for claiming the itemized deduction for medical expenses.
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- Can I take a tax deduction for my HDHP premium?
Not at this time.
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- I'm over 55 and would like to make catch-up contributions to my HSA, like I've done with my IRA. Is that possible?
Yes, individuals 55 and older who are covered by an HDHP can make additional catch-up contributions each year until they enroll in Medicare. The additional "catch-up" contributions to HSA allowed are as follows:
- 2007 - $800
- 2008 - $900
- 2009 and after - $1,000
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- I turned 55 this year. Can I make the full "catch-up" contribution?
If you had HDHP coverage for the full year, you can make the full catch-up contribution regardless of when your 55th birthday falls during the year. If you did not have HDHP coverage for the full year, you must pro-rate your "catch-up" contribution for the number of full months you were "eligible", i.e., had HDHP coverage.
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- If both spouses are 55 and older, can both spouses make "catch-up" contributions?
Yes, if both spouses are eligible individuals and both spouses have established an HSA in their name. If only one spouse has an HSA in their name, only that spouse can make a "catch-up" contribution.
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- If each spouse has self-only HDHP coverage (neither spouse has family coverage), how much can we contribute?
Each spouse is eligible to contribute to an HSA in their own name, up to $2,850 for individuals for 2007 (The catch up contributions are in addition to these limits.)
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- Does tax filing status (joint vs. separate) affect my contribution?
Tax filing status does not affect your contribution.
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- I'm a single parent with HDHP coverage but have child/relative that can be claimed as a dependent for tax purposes, and this dependent also has non-HDHP coverage. Am I still eligible for an HSA?
Yes, you are still eligible for an HSA. Your dependent's non-HDHP coverage does not affect your eligibility, even if they are covered by your HDHP. You can contribute up to $2,850.00 in 2007 towards your HSA.
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- May a self-employed person contribute to an HSA on a pre-tax basis?
No. Self-employed persons may not contribute to an HSA on a pre-tax basis and may not take the amount of their HSA contribution as a deduction for SECA purposes. However, they may contribute to an HSA with after-tax dollars and take the above-the-line deduction.
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