The Maximum Deduction for a Health Savings Plan

One of the neat things about a health savings plan is you can save money for out-of-pocket medical expenses. Health savings accounts (HSAs) are tax-exempt, so you don't pay income taxes on your contributions. If you make contributions from your net income, you're eligible for a tax deduction. The maximum deduction you can take is equal to the maximum contribution. Maximum contribution amounts are set by the IRS, and may change from year to year.


You can take the maximum deduction for a HSA if no one else can claim you as a dependent. Even if someone who can ends up not claiming you on a tax return, you aren't eligible. You must also be covered under a high deductible health insurance plan, and that must be your only primary insurance coverage.

High Deductibles

The idea behind an HSA is to help offset costs insurance won't cover. High deductible insurance plans had a minimum annual deductible of $1,200 as of 2012. Your maximum out-of-pocket expenses per year could be as high as $6,050. If you have family coverage, the minimum annual deductible is $2,400 with a maximum out-of-pocket expense of $12,100. According to the IRS, these figures don't take in out-of-network expenses. Some insurance plans charge lower costs when you see doctors within the plan's network.


An HSA is designed to help you offset out-of-pocket expenses such as co-pays for doctor visits and medical tests. If your insurance plan only covers you, your annual contribution limit for 2012 was $3,100. The family coverage contribution limit was $6,250. You don't have to use the money in the same year you deposit it. Contributions carry over from year to year and from employer to employer.


You may deduct the full amount of the maximum annual contribution, but not a dime more. This means if you deposit $3,000 and your contribution limit is $1,200, your deduction is $1,200. In most cases the IRS says you'll have to pay a 6 percent tax on excess HSA contributions. That penalty is waived if you withdraw the interest and excess contributions in the same year.

About the Author

Helen Akers specializes in business and technology topics. She has professional experience in business-to-business sales, technical support, and management. Akers holds a Master of Business Administration with a marketing concentration from Devry University's Keller Graduate School of Management and a Master of Fine Arts in creative writing from Antioch University Los Angeles.