According to several tax attorneys, the IRS recently announced it is changing the annual Health Savings Accounts (HSA) contributions limits. Specifically, tax lawyers report the Agency will be increasing the contribution limits, to adjust for inflation. Eligible individuals covering themselves only, may expect a fifty dollar ($50.00) increase for calendar year 2012. In other words, individuals covering themselves alone may contribute a maximum of $3,100.00 to their HSA in calendar year 2012.
The contribution limit for family coverage will also be increasing in 2012. The family contribution limits increase by one hundred dollars ($100) to a maximum of $6,350.
Further, the tax attorneys point out annual deductibles for High Deductible Health Plans (HDHP), which must be used in conjunction with HASs, will not be changing from the current 2011 minimum eligibility threshold of $1,200 for individual, self-only coverage, and $2,400 for family coverage. The tax lawyers also mention, however, annual out-of-pocket expense maximums for 2012 will be now covered up to $6,050 (up from $5,950 for 2011) for individuals; and $12,000 (up from $11,900) for families.
Most tax attorneys and other tax professions say HSAs and HDHPs are not for everyone. Often, hitting the right amount and maximizing your tax benefit can be difficult, particularly if you do not incur regular, predictable medical expenses annually. If you overestimate your health expenses and make larger contributions which end-up exceeding out-of pocket medical expenses, you stand to forfeit the overpayments and lose, or at least mitigate any benefits of having the HSA in the first place.
If you would like to get additional details regarding HSAs and HDHPs, you may either go to the Agency’s website (www.irs.gov), or you may refer directly to Internal Revenue Code, Sections 223, et. seq. Alternatively, you may wish to consider consulting a competent IRS tax attorney to get answers to your questions. Tax lawyers and other tax professionals warn that mistakes in managing your HSAs and HDHPs can be costly, so getting correct information upon which you may rely is critical to maximizing your tax benefits from these accounts and staying out of trouble with the IRS.
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