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It’s Not too Late to Maximize Your HSA Tax Benefits for 2020

Dec 2, 2020 8:00:00 AM

With 2020 quickly drawing to a close and the holiday season in full swing, every day can feel like a blur. But in the midst of all the hustle and bustle, be sure to take a few moments to check in on your health savings account. Because if you haven’t yet hit your maximum HSA contribution limit, you’re missing out on the full HSA tax advantage.

Check Your Year-to-Date HSA Contributions to Ensure You’re Not Leaving Money on the Table

When it comes to HSAs, keep this simple mantra in mind—the more you contribute, the more you save.

Contributing the maximum HSA contribution limit to your account each year ensures you’re maximizing your tax savings upfront, as well as your ability to have the most tax-free money added to your HSA to save and invest for the long term.

So if you still have room to contribute for this year, now is the time. Adjust your recurring HSA contribution accordingly or make a one-time contribution to hit the maximum HSA contribution limit.

With a Bend HSA, you can quickly and easily check your year-to-date contributions—including any employer or other contributions—right from your account dashboard. You can also adjust your current contributions or add a one-time lift to your account in a matter of moments. A Bend HSA makes it simple and stress-free to adjust your approach on demand.

A Quick Refresher on Maximum HSA Contribution Limits for 2020 and 2021

While it’s ideal to hit your maximum HSA contribution limit each year, remember that the IRS does set limits based on your specific coverage level.

  • 2020 HSA Contribution Limits
    • $3,550 maximum HSA contribution limit for individual coverage
    • $7,100 maximum HSA contribution limit for family coverage
    • $1,000 catch-up contribution for either coverage-level maximum HSA contribution limit
  • 2021 HSA Contribution Limits
    • $3,600 maximum HSA contribution limit for individual coverage
    • $7,200 maximum HSA contribution limit for family coverage
    • $1,000 catch-up contribution for either coverage-level maximum HSA contribution limit

A word of caution—remember that the annual maximum HSA contribution limits include all contribution sources. So if your employer or anyone else contributes—or will contribute—to your HSA, you’ll need to take that into account so you don’t exceed the annual maximum HSA contribution limit.

Don’t Overlook Your HSA Contribution Strategy

Beyond HSA maximum annual limits and immediate tax savings, many individuals, including existing HSA accountholders, aren’t fully aware of or don’t consider an HSA’s potential to be used as a critical part of their big-picture, long-term investment planning and strategy. Your HSA contribution strategy shouldn’t be glossed over—that mistake can end up costing you big short and long-term.

Luckily, when you partner with the right HSA provider, planning your HSA contributions doesn’t have to be stressful or time consuming, regardless of how much you know about HSAs.

With a Bend HSA, you get access to a feature-rich HSA platform filled with resources and tools you need to maximize your HSA. That includes an industry-unique HSA Contribution Planner. Bend’s HSA Contribution Planner eliminates the guesswork and helps guide you to the best contribution strategy tailored to your specific situation in a few easy steps.

To learn more about Bend’s Contribution Planner and the importance of HSA contribution planning, check out this blog post. You can also read more on why HSAs aren’t just a 12-month benefit.

No matter where you’re at with HSA contribution planning, remember this—as tempting as it can be to make no or very minimal contributions to your HSA, doing so shortchanges yourself today and into the future. Having a health savings account is the best way to fund your current healthcare expenses while building equity for future healthcare expenses. Leveraging an HSA is the only way to do so in such a tax-advantaged manner. Health savings accounts offer unrivaled tax benefits, as well as long-term saving and investment opportunities, better than 401(k)s and other retirement accounts.

It definitely pays to take the time to think over your HSA contribution planning and adjust your approach if needed. And there’s no better time than now, before the year ends.

Finish the Year Strong and Move into the New Year Focused on Better Financial Health with Help from Bend

There’s no doubt that 2020 has been a remarkable year filled with its share of uncertainty and challenges. But with challenges come opportunities, and now is the right time harness the opportunity to take full advantage of all the benefits an HSA offers.

Celebrate the season knowing you’ve maximized your HSA in 2020 and set yourself up for success in 2021 and beyond—no matter what lies ahead. And remember, no matter who you are or where you’re at in your journey, Bend is here to help you become an HSA expert and navigate your path to better short and long-term financial health through your HSA.

Connect with us today and let’s work together to make your money work smarter for you this year and for years to come.

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