Ask Terry Questions Health savings account and taxes

Health savings account and taxes

By Terry Savage on April 09, 2023 | Insurance & Annuities

I now elect to have an additional $350 a paycheck withheld for federal taxes because of having to pay a decent amount around tax time. If instead I put the $350 into my HSA each paycheck how would that affect having to pay taxes at tax time? Does that money I put into my HSA still count towards my income?

Terry Says

The HSA contribution is pre-tax, so it reduces your income. Just check with your employer to make sure the additional amounts are allowable under the contribution limits.

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