The IRS has announced the Health savings account (HSA) contribution limits for 2025. While the increases are modest compared to the record-high HSA limit increase for 2024, they still offer significant tax benefits.
Here’s what you need to know now to plan for the coming year.
2025 annual HSA contribution limits
HSAs offer a way to save and invest for healthcare spending. You can use your health savings account funds for various qualified medical expenses, including deductibles, copayments, and prescriptions. Additionally, for those 65 and older, HSA funds can be used to pay Medicare premiums.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
To be eligible to contribute to an HSA, you must be enrolled in an HSA-qualified high deductible health plan (HDHP) and not be enrolled in Medicare.
Note: For 2025, the IRS has updated the definition of an HDHP: a plan must have a minimum annual deductible of $1,650 for individual coverage (up from $1,600 in 2024) or $3,300 for family coverage (up from $3,200 in 2024).
- For individuals with self-only coverage under an HDHP, the annual HSA contribution limit will rise to $4,300 for 2025, up from $4,150 this year.
- The limit for those with family coverage increases to $8,550 for 2025, up from $8,300 for 2024.
For those 55 and older, by the end of the calendar year, there is an additional catch-up contribution.
(This allows you to contribute even more towards healthcare savings, which can be helpful as healthcare expenses often increase with age.)
Right now, the HSA catch-up contribution is $1,000.
HSA tax benefits
It’s often said that HSAs offer a triple tax advantage: contributions are tax-deductible, and earnings grow tax-free. Additionally, withdrawals for qualified medical expenses are tax-free.
Another advantage of HSAs is that, unlike traditional retirement accounts, there are no required minimum distributions (RMDs). That allows the funds to grow tax-free for as long as they remain in the account.
However, it should also be noted that, as Kiplinger reported, the Consumer Financial Protection Board (CFPB) recently cited some "hidden costs of HSAs" that it says account holders should be aware of. For more information, see Tax Benefits and Hidden Costs of HSAs.
HSA max contribution: Bottom line
While the 2025 HSA contribution limit increases are not as significant as for 2024, they still provide an opportunity to work on your retirement savings strategy and potentially reduce your tax burden.
Consult with a financial advisor or tax planner if you need help determining how to integrate your HSA into your broader financial plan.
Related
-
Capital Gains Tax Quiz: How Well Do You Really Know IRS Investment Tax Rules?Quiz Take our capital gains tax quiz to test your investment taxes knowledge. Learn about loss rules, holding periods, and tax incentives that could impact your savings.
-
6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)Retirement Taxes Here’s how converting your traditional retirement account to a Roth IRA can boost your nest egg — but avoid these costly scenarios.
-
Could Tax Savings Make a 50-Year Mortgage Worth It?Buying a Home The 50-year mortgage proposal by Trump aims to address the housing affordability crisis with lower monthly mortgage payments. But what does that mean for your taxes?
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.
-
New RMD Rules: Can You Pass This Retirement Distributions Tax Quiz?Quiz Take our RMD quiz to test your retirement tax knowledge. Learn about RMD rules, IRS deadlines, and tax penalties that could shrink your savings.
-
10 Retirement Tax Plan Moves to Make Before December 31Retirement Taxes Proactively reviewing your health coverage, RMDs and IRAs can lower retirement taxes in 2025 and 2026. Here’s how.
-
When to Hire a Tax Pro: The Age Most Americans Switch to a CPATax Tips Taxpayers may outsource their financial stress by a specific age. Find out when you should hire a tax preparer.
