With Tax Day approaching, nearly one-third of Americans are expected to wait until the final week to complete and file their 2025 tax returns, according to recent surveys.
As the April 15 deadline nears, Health Savings Account (HSA) users need to take steps to better understand how their accounts affect annual tax filings and how to maximize their financial benefits.
“It’s easy to procrastinate tax prep, but these simple facts and tips for HSA users will simplify the process of using and tracking HSA funds and help account holders of all ages understand contribution and eligibility rules that support their health and financial needs across all stages of life,” said Itamar Romanini, vice president and general manager of HSA Store.
Below are five steps HSA users can consider before the tax filing deadline.
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Make a Prior-Year Contribution Before April 15
One commonly overlooked HSA benefit is the ability to make contributions for the prior tax year up until the tax filing deadline. Contributions toward a 2025 HSA can be made until April 15, 2026.
For eligible individuals, this provides an opportunity to reduce taxable income even after the calendar year has ended. Whether contributing a lump sum or a smaller amount, last-minute contributions may offer meaningful tax advantages.
Reimburse Yourself for Out-Of-Pocket Expenses
Some account holders may not realize that eligible healthcare expenses paid with cash or a credit card can be reimbursed later from their HSA. As long as receipts are saved, healthcare expenses can be reimbursed at any time, even 10 years later, using HSA funds.
Don’t Overlook Everyday Purchases
In addition to reducing taxable income through contributions, HSA users can also save an estimated 30% by using tax-free HSA funds to purchase eligible everyday health products. These include cold and flu medications, pain relievers, first-aid supplies, eye care products, menstrual care items, and sunscreen.
Bank Funds for the Future
HSAs offer a “triple tax advantage”: reducing taxable income through contributions, using tax-free funds for eligible purchases, and saving funds for retirement. Because the account belongs to the individual, unused funds roll over year to year and remain with the account holder even if they change jobs or retire.
Funds can be allowed to grow to cover healthcare expenses in retirement, and a portion of HSA funds may be invested in stocks, bonds, or mutual funds, depending on the HSA administrator.
Start Small and Contribute Consistently
For individuals unable to contribute the full annual amount at once, smaller, consistent contributions can still make a difference. Contributions can be made at any time by account holders, employers, or others. Setting aside $10 or $20 per paycheck can help establish a habit with long-term financial benefits.
As a general rule, every $100 contributed may result in roughly $30 in tax savings, making even modest contributions potentially impactful.
As the tax deadline approaches, account holders should review their options and take advantage of available tools and strategies to better manage healthcare expenses and maximize tax benefits.
Read More:
- The $19,000 Tax-Free Strategy Baby Boomers Can Use To Help Younger Generations
- The IRS Adjusted Its Tax Income Brackets — Are You Ready?
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