Contribution Limits for Health Savings Accounts are Higher for 2014

The maximum limits for funding an HSA, otherwise known as a health savings account, are higher for 2014. The IRS adjusts the upper end of the contribution amount depending on inflation. For 2014, the amount is now $3300 for an individual, up $50 from 2013. Families are now at $6550, up from $6450. The increase isn’t as high as it was for 2013, due to the government’s numbers determining that the rate of inflation is lower. 

Putting a contribution into an HSA is a tax-free activity. The money that is put into the account is taken from gross pay (before taxes), and will not be taxed if it is used for health care. The money in an HSA will roll over from year to year, and the owner of the account controls its use. In fact, it’s possible to invest the money in stocks and bonds in order to increase the balance. The only limitation is the annual contribution, not how much money is in the account. It’s a great opportunity for someone to hedge their bets against out-of-pocket costs as he or she ages, and runs the higher risk of needing health care.

Are you in Colorado and wondering if getting an HSA is the right decision for you? Contact Pilkington Financial Services today to learn more!