Health Savings Account
Pre-tax account for medical expenses paired with a high-deductible health plan. Triple tax advantage. 2024 limit: $4,150 individual.
Who pays it
Anyone enrolled in a qualifying high-deductible health plan (HDHP) at work. The HSA is paired with the HDHP.
How much
2024 limits: $4,150 individual / $8,300 family. 2025: $4,300 / $8,550. Add $1,000 catch-up if you're 55+.
Where it appears on your W-2
Box 12 with code W (your contribution + your employer's). Reduces Box 1, Box 3, and Box 5 wages — uniquely powerful.
Tax impact
Triple tax advantage: contributions reduce taxable income, growth is tax-free, and withdrawals for medical expenses are tax-free. After 65, you can use the money for anything (taxed like a 401(k) if not medical).
Common questions about HSA
What's the catch with an HSA?
You need a high-deductible health plan to qualify, which means higher out-of-pocket costs if you have a major medical event. Best for healthy savers who can self-fund routine care.
Can I keep my HSA if I leave my job?
Yes — it's yours, like a 401(k). You can roll it to another HSA provider and keep contributing if you're still on an HDHP.
Filing your taxes?
If understanding HSA is part of getting your return right, these tools handle the math for you.
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