HSA

[Kindertee]

Hello,

How much should I put into my HSA? 

How does it affect my taxes?

[drc845443]

For 2022, you can contribute up to $3650 for a self-only plan , and $7300 for a family plan.

How much you actually want to contribute is up to you.

The contributions to the HSA are usually deducted from your wages by your employer and deposited into the HSA. These deduction from your paycheck are pre-tax deductions - you do not pay any tax on the money deposited into the HSA.

You can however make additional contributions directly if you have not reached the maximum. Such additional contributions made with after-tax money are deductible on your tax return.

[Kindertee]

Since funds are deducted pre-tax, that will lower my tax bracket.  Correct?  Is this recommended?

Also, will I get any additional forms during tax time?

[drc845443]

As funds are deducted pre-tax, you get favorable tax treatment and it may lower your tax bracket, but not necessarily always the case.  Saving for medical expenses through an HSA is recommended as the amount in the HSA is yours even if you leave your employer, plus you will not pay any taxes on the amount as long as you use it for medical expenses.

At tax time, you will get a Form 1099-SA which will report the amount that you used during the year. You have to report the Form 1099-SA when you prepare your tax return. 

You will also get a Form 5498, which will report your contributions and the Fair Market Value of your account at the end of the year.