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There’s Still Time to Maximize Your 2021 HSA Tax Benefits!

Mar 16, 2022 8:00:00 AM

Tax Day will be here before we know it.

For most taxpayers, that means the filing deadline to submit your 2021 tax return or an extension to file is Monday, April 18, 2022. And while you can’t forget about filing your tax return on time, if you have a health savings account, you also can’t forget you have until the same deadline of April 18, 2022 (whether you’re filing for an extension or not) to make any final HSA contributions counting toward the 2021 tax year.

So while the clock is ticking, there’s still time to ensure your taxes are filed while also carving out time to check your year-to-date HSA contributions for 2021 to ensure you’re not leaving HSA savings on the table.

Don’t Leave HSA Tax Savings on the Table

If you’ve ever done a search for HSA advantages or HSA benefits, you’ve likely come across the term “triple tax advantage.” As a quick refresher, that means:

  1. HSA contributions are tax free–meaning pretax contributions aren’t included in your gross income and aren’t subject to income taxes, and after-tax contributions are 100% deductible on your tax return and lower your overall tax liability
  2. HSA funds can be used tax free for any qualified expense–meaning whether you use your funds now or in the future, as long as the expense is an HSA-eligible expense, no taxes are required
  3. HSA funds grow tax free–meaning any interest or other account growth happens free of taxes

So remember, when it comes to the first element of an HSA’s triple tax advantage—the more you contribute annually, the more you save in taxes annually—because the higher your HSA contributions, the lower your overall tax liability.

Contributing the maximum HSA contribution limit to your account each year means 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.

A Reminder on 2021 HSA Contribution Limits

When checking your 2021 year-to-date HSA contributions, don’t forget, the annual maximum HSA contribution limits include all contribution sources across all HSAs you may have open. That means if your employer or anyone else contributed to your HSA, or if you have more than one HSA that you’ve contributed to in 2021, you need to figure that into your year-to-date total so you don’t exceed your maximum HSA contribution limit.

That being said, here’s a quick reminder on 2021 HSA contribution limits:

2021 Maximum HSA Contribution Limits
Individual Coverage $3,600
Family Coverage $7,200
Additional Catch-Up Contribution for Age 55+ $1,000 on top of individual or family limit


Contribute Now, Reap the Rewards Short and Long Term

If after checking your year-to-date HSA contributions, you end up still having room to contribute for 2021, now is the time.

Depending on your HSA provider, either adjust your current contributions or make a one-time contribution to maximize your tax savings for 2021. Be sure to work with your HSA provider to ensure the correct year is applied to your extra contributions so they’re attributed to 2021 and not the current tax year of 2022.

Any boost to your contributions helps grow your savings short and long term—especially if you choose to invest your HSA funds and help level up your retirement planning.

Now or Later–The Many Ways to Use Your HSA Funds

Whether you use your HSA funds now or save them for the future, the list of HSA-eligible expenses only continues to grow.

IRS Publication 502 provides a breakdown of categories of HSA-qualified healthcare expenses—everything from dental and vision costs to face masks and feminine care products.

If you have a Bend HSA, you can quickly and easily use the “What’s Eligible?” feature right on your account dashboard to find in-depth details on qualified expenses, including when a letter of medical necessity may be necessary. But even if you don’t have a Bend HSA, it’s important to understand just how wide a variety of healthcare expenses are HSA-eligible expenses. It’s another critical element of planning your HSA contributions and overall HSA strategy.

Make the Most of Your HSA Now and Into the Future with Bend

Speaking of HSA strategy, when you choose to partner with Bend for your HSA, you don’t have to be an HSA expert to make the most of your health savings account.

With Bend, you unlock access to the industry’s smartest and most user-friendly HSA platform—plus expert, responsive support and proactive education through every step of your HSA journey. We’re here to make HSAs easy for everyone, regardless of if it’s your first HSA or you’re an HSA veteran.

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