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Tax Tip Tuesday: 2018 HSA Limits​​​​​​​

Here’s what you need to know about Health Savings Accounts (HSA) for 2018.

Eligible individuals may, subject to statutory limits, make deductible contributions to an HSA. Employers, as well as other persons (e.g., family members), also may contribute on behalf of an eligible individual. Employer contributions generally are treated as employer-provided coverage for medical expenses under an accident or health plan and are excludable from income.

In general, a person is an “eligible individual” if he or she is covered under a high-deductible health plan (HDHP) and is not covered under any other health plan that is not a HDHP, unless the other coverage is permitted insurance (e.g., for worker's compensation, a specified disease or illness, or providing a fixed payment for hospitalization).

Limitation on Deductions

For calendar year 2018, the limitation on deductions is:

  • $3,450 for an individual with self-only coverage — up from $3,400 for 2017.

  • $6,900 for an individual with family coverage under a HDHP — up from $6,750 for 2017.

Each of these amounts is increased by $1,000 if the eligible individual is age 55 or older.

High Deductible Health Plan

A HDHP for 2018 is a health plan with an annual deductible that is not less than:

  • $1,350 for self-only coverage — up from $1,300 for 2017.

  • $2,700 for family coverage — up from $2,600 for 2017.

With respect to which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage — up from $6,550 for 2017. For family coverage, the amount is $13,300 — up from $13,100 for 2017.

We will be on break next week and will return with a new edition of Tax Tip Tuesday on Tuesday, May 23rd.

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein

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