June 30, 2019 10:32 pm

Health Savings Accounts for 2020

Recently, the IRS announced next year’s contribution limits for health savings accounts (HSAs), as well as requirements for high-deductible health plans (HDHPs) to which HSAs must be linked (Rev. Proc. 2019-25).

For 2020, the maximum deductible contribution to an HSA is $3,550 (up from $3,500 in 2019) for self-only coverage, or $7,100 (up from $7,000 in 2019) for family coverage.  The annual contribution limit is $1,000 higher if you are age 55 by the end of the year but not on Medicare. However, if both spouses meet this age requirement, they must have separate HSAs to each contribute an additional $1,000. Starting with the month you enroll in Medicare, you may not make any further HSA contributions.

You can only contribute to an HSA if you have health coverage through an HDHP. To be an HDHP in 2020, a self-only coverage plan must have a minimum annual deductible of $1,400 (up from $1,350 in 2019), and an out-of-pocket limit of $6,900 (up from $6,750 in 2019). For family coverage, the minimum annual deductible is $2,800 (up from $2,700 in 2019), and the cap on out-of-pocket costs is $13,800 (up from $13,500).

The deadline for making HSA contributions:

  • For 2019: April 15, 2020
  • For 2020: April 15, 2021
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Tax Glossary

Estimated tax

Advance payment of current tax liability based either on wage withholdings or installment payments of your estimated tax liability. To avoid penalties, you generally must pay to the IRS either 90% of your final tax liability, or either 100% or 110% of the prior year’s tax liability, depending on your adjusted gross income.

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