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INCREASES IN HSA CONTRIBUTION LIMITS FOR 2016


On May 4, the IRS announced in Revenue Procedure 2015-30, the annual contribution limits for health savings accounts (HSA) and the minimum deductible amounts and maximum out-of-pocket expense amounts for high deductible health plans for calendar year 2016.

Individuals who participate in a health insurance plan with a "high deductible" are permitted a tax deduction for contributions to qualified HSAs. These individual and family plans are designed to help taxpayers pay their qualified medical expenses in a tax-free manner.

To be eligible to contribute to an HSA, an individual must participate in a "high deductible health plan". The IRS has defined this term as a health plan with an annual deductible that is not less than a certain limit each year and for which the annual out-of-pocket expenses do not exceed a certain limit each year.

For calendar year 2016, the maximum allowable deduction for an individual with self-only coverage under a high deductible health plan is $3,350. For taxpayers with family coverage under a high deductible health plan, the maximum deduction is $6,750.

Also for 2016, a "high deductible health plan" has been defined as annual deductibles that are not less than $1,300 (self-only coverage) or $2,600 (for family coverage), and the annual out-of-pocket expenses cannot exceed $6,550 (self-only coverage) or $13,100 (family coverage).  

 

For more information on the new HSA contribution limits, please contact your professional at UHY LLP in Detroit 313 964 1040, Farmington Hills 248 355 1040 or Sterling Heights 586 254 1040.