Can I Use a Health Savings Account to Reduce My Taxes?

Yes — a Health Savings Account (HSA) is one of the most tax-efficient accounts available: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. To contribute, you must be enrolled in a High Deductible Health Plan (HDHP) and not covered by Medicare. For 2024, you can contribute up to $4,150 (individual) or $8,300 (family), plus $1,000 catch-up if you're 55 or older. Unlike an FSA, HSA funds roll over indefinitely — many people invest their HSA and let it grow for decades to cover healthcare costs in retirement. After age 65, HSA funds can be withdrawn for any purpose (not just medical), making it function like a traditional IRA.