HSA inflation adjustments issued for 2014

BY SALLY P. SCHREIBER, J.D.

On Thursday, the IRS issued the inflation-adjusted figures for the annual contribution limitation for health savings accounts (HSAs) and the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans for calendar year 2014 (Rev. Proc. 2013-25).

Under Sec. 223, individuals who participate in a health plan with a high deductible are permitted a deduction for contributions to HSAs set up to help pay the individuals’ medical expenses. The limit on the contribution deduction is subject to an inflation adjustment each year. For 2014, the annual limitation on deductible contributions is $3,300 for individuals with self-only coverage and $6,550 for family coverage.

To be eligible to contribute to an HSA, individuals must participate in a “high deductible health plan,” which is defined 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, including deductibles, co-payments, and other amounts, but excluding premiums, does not exceed a certain limit each year (Sec. 223(c)). As with the contribution deduction limitation, these limits are subject to annual inflation adjustments. For 2014, the lower limit on the annual deductible under a high-deductible plan is $1,250 for self-only coverage and $2,500 for family coverage, the same amounts that applied in 2013. The upper limit for these out-of-pocket expenses is $6,350 for self-only coverage and $12,700 for family coverage, amounts that have increased since 2013.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

8 accounting and auditing issues you can’t afford to ignore

Download this sponsored report for an overview of some of the most important developments accountants and auditors are facing today.

DOWNLOAD

Filing season quick guide — Tax year 2014

Tax season started Jan. 20. Download our “quick guide,” a printable card that contains dollar thresholds, tax tables, standard amounts, credits, and deductions to keep at your fingertips during tax season.

TAX NEWS

Expired tax provisions extended for 2014

President Barack Obama signed legislation that retroactively extended more than 50 expired tax provisions for 2014, allowing taxpayers to take advantage of a host of tax incentives during this filing season.