HSA Contributions
Triple tax advantage: Deduct contributions, grow tax-free, withdraw tax-free for medical expenses.
Tax Form
Form 8889, Schedule 1 Line 13
Estimated Savings
$1,000-8,500/year
IRS Reference
Publication 969
Income Level
How It Works
Health Savings Accounts (HSAs) offer a triple tax advantage that's especially valuable for self-employed creators: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. You must be enrolled in a High Deductible Health Plan (HDHP) to contribute. This is one of the most powerful tax-advantaged accounts available.
IRS Rules & Requirements
- 2025 contribution limits: $4,300 (self-only) / $8,550 (family)
- Age 55+ catch-up contribution: Additional $1,000
- Must be covered by qualifying High Deductible Health Plan (HDHP)
- 2025 HDHP minimum deductible: $1,650 (self-only) / $3,300 (family)
- Cannot be enrolled in Medicare or claimed as a dependent
Real Examples
Self-only HSA contribution of $4,300 = $4,300 deduction (plus tax-free growth)
Family HSA contribution of $8,550 = $8,550 deduction
Age 55+ contributing $4,300 + $1,000 catch-up = $5,300 deduction
Common Mistakes to Avoid
- Contributing to HSA without qualifying HDHP coverage
- Over-contributing and facing 6% excise tax on excess
- Not understanding testing period rules for last-month rule
- Using HSA for non-qualified expenses before age 65 (20% penalty + tax)
Pro Tip
HSAs are the only triple-tax-advantaged account. Consider maxing this out before other retirement accounts - the funds can also be used for retirement after 65 (without the 20% penalty for non-medical expenses).
Related Deductions
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