Each year the IRS set a maximum contribution limit for Heatlh Savings Accounts, since these are tax free accounts. For a family the maximum allowed contribution in 2010 was $6150. Up until I found out I was pregnant, I had only deposited $20 in our HSA.
I figured I would just add money to it when we needed to go to the doctor. However, upon realizing that I was expecting, I knew we would want to deposit the full contribution amount. So I went to the IRS website to verify the maximum contribution amount for 2011 and found out some very important information. Even though the year 2010 was over, I still had until April 18, 2011 to contribute last year's total contribution of $6150!
So we quickly scrimped and saved. I went to the bank and deposited last years full contribution, making sure the bank credited it correctly for 2010.We still haven't used all that money in the HSA up yet, but I am so thankful to God that it is in there and tax free.
We are currently saving up to add 2011's contribution, which the IRS didn't change the amount on, so it is still $6150. I am sure that my hospital stay and newborn care will eventually use up the full amount. But isn't it great not be taxed on $12,300! I really like that HSA money rolls over every year, is tax free, and can be passed on to my kids. I also really like not throwing away all that money on insurance company premiums!
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