New tax relief for high deductible Health Savings Account contributions
Posted on June 10, 2018
Contrary to popular belief, the Internal Revenue Service does listen to its taxpayers.
In a move that will bring an audible sigh for taxpayers with family healthcare coverage under a High Deductible Health Plan (HDHP) and who contribute to a Health Savings Account (HSA), the IRS made a significant change to the 2018 Tax Cuts and Jobs Act that will provide financial relief, come tax-time. And since health care plans can be quite costly, this news is good news for many.
Here’s what changed:
According to Teipen Selanders Poynter & Ayres CPAs, taxpayers with family coverage under an HDHP may now treat $6,900 as the maximum deductible HSA contribution on their 2018 tax return.
This welcome change in the inflation adjustment calculations for 2018 under the Tax Cuts and Jobs Act, effectively reduces the maximum deductible HSA contribution for taxpayers with family coverage under an HDHP by $50, to $6,850.
The IRS announced this relief for affected taxpayers and allows the $6,900 limitation to remain in effect for 2018. (The original $6,900 annual limitation was originally published in Revenue Procedure 2017-37, but was re-evaluated and reversed in Revenue Procedure 2018-27.)
Need more specific information?
- For more information about the Tax Cuts and Jobs Act (enacted in Dec. 2017) visit the Tax Reform page on gov.
- To get more information on the new HDHP ruling, click on Revenue Procedure 2018-27.
- The CPAs at Teipen Selanders Poynter & Ayres are also happy to help walk you through the new ruling and answer any questions you may have.
Understanding the ins and outs of tax reform and health insurance are two of the many areas our CPAs are frequently asked about. The good news is that we are up to speed on both. If you have a question, chances are very good that we can provide you with clear answers and explanations. Give us a call.