IRS Announces HSA Contributions Limits for 2022

By: Stacey Nickens

Health savings are an important part of any financial plan. It’s crucial that you prepare for unexpected medical costs, especially as you get older.

HSAs, or Health Savings Accounts, offer a tax-advantaged way to save for and cover these health costs. You can deduct contributions to an HSA. Your employer can contribute to your HSA without the contribution increasing your taxable income. Finally, the funds in your HSA grow tax-free, and distributions can also be taken tax-free as long as you use them to pay for qualified medical expenses.

However, there are limits on how much you can contribute to an HSA as well as specifications around who can contribute to an HSA. The IRS just released these 2022 limits, and I would review them to prepare for the upcoming year.

In 2022, individuals can contribute up to $3,650 to an HSA, and families can contribute up to $7,300 to an HSA. Taxpayers who’re 55 or older by the end of 2022 can make additional, catch-up contributions of up to $1,000.

You can only contribute to an HSA if you are covered by a high deductible health plan. In 2022, these plans will include self-coverage plans with deductibles of at least $1,400 and family plans with deductibles of at least $2,800.

Finally, the IRS imposes limits on the out-of-pocket expenses that your health plan requires you to pay. In 2022, the out-of-pocket limit for individuals will be $7,050 and for families will be $14,100.