January marks the start of a new year and is a great time to remind your employees that they have until April 15th, 2022 to make contributions and max out their health savings accounts (HSAs) for 2021.
Encouraging your employees to contribute to their HSAs will give them more money for future medical expenses, especially if they invest it in low-cost ETFs. They also get a federal and state tax deduction when they file their 2021 taxes before April 15th. However, if their contribution is made outside of payroll, they won’t be eligible for the 7.64% payroll/Medicare deduction. Even so, it’s still an incredibly powerful investment for today and for retirement.
It’s important to note that the HSAs need to be established in 2021 to be eligible to make the contributions for 2021.
Quick Reference for Contributions and Limits for 2021:
Source: IRS, Revenue Procedure 2021-25
Accessing relevant information at the right time is crucial for your employees health and financial well-being. We’ve built a great library of reminders and HSA-related information that is all at the employer’s fingertips through the SavingsOak employer portal. This will empower your employees to take action to increase their savings. Automatically send information to your employees with the SavingsOak HSA and help them build their health and retirement savings today.