New IRS Limits Impact Health Spending Accounts

The IRS has recently issued inflation-adjusted Health Savings Accounts (HSA) limits for the 2019 calendar year. Hall and Company, an Irvine CPA firm, wants to keep you informed.  As a contributor, you will see some slight changes to deductible amounts and out-of-pocket expenses for high-deductible health plans.

There are more than 21 million Americans with HSA accounts, holding about $45 billion in assets.   This is a plan that allows contributors to put tax-free money into an account, to later use for out-of-pocket healthcare expenses.

Under section 223, people who have a high-deductible health plan are allowed a deduction for all contributions to HSAs used to pay medical bills.

Moving forward in 2019, the limit on deductible contributions is now $3,500 for self-coverage and $7,000 for family coverage.

Both totals are slight increases from the 2018 figures.   The IRS announced that the limit for family coverage is $6,900 – this is a change due to the Tax Cuts and Jobs Act of 2017.

Only people participating in a high deductible health plan are able to contribute to an HSA.

If you have access to an HSA and you are not contributing, you should talk with your Hall and Company CPA about the benefits of an HSA account.   There is a greater importance the higher your tax bracket is!

If this sounds like we’ve been here before recently, you’d be correct.  The IRS had announced in March that it would lower the limit to $6.850.

We also want to remind you that if you are over the age of 55-years-old, you are permitted to contribute an additional $1,000.

At Hall and Company, our team of accountants and tax professionals stays up to date with important tax and financial changes that impact your bottom line.  Everything we do is centered on what’s best for our clients.  We are committed to this philosophy and we “live it” every day.

If you’d like expert financial and business advice from a CPA firm that you can trust, reach out to our team today!

 

 

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