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Can I Still Make a 2018 HSA Contribution?

4 min read

30 sec brief

The New Year’s ball has fallen, and 2019 has arrived. Not only that, but we’re already a month and a half into the new year. You might be looking at your overall financial picture, as tax season is right around the corner, and be thinking you’d like to utilize your Health Savings Account (HSA) more…

The New Year’s ball has fallen, and 2019 has arrived. Not only that, but we’re already a month and a half into the new year. You might be looking at your overall financial picture, as tax season is right around the corner, and be thinking you’d like to utilize your Health Savings Account (HSA) more this year. Perhaps you’re wondering, “Can I still make a 2018 HSA contribution”?

Prior Year Contributions

Health Savings Accounts (HSAs) have some flexibility as to when you can make contributions for a particular year. The 2018 HSA contribution limits were $3,450 for individuals and $6,900 for families, but that amount didn’t have to be contributed in fiscal year 2018.

Thanks to prior year contributions associated with HSAs, you can make a contribution up to the tax filing deadline, typically April 15th of the next year. A prior year contribution is one that is applied to the previous years limit.

How Do Prior Year Contributions Work?

Let’s say you opened an HSA in 2018 but didn’t make any contributions. At the beginning of 2019, you realized you wanted to utilize your HSA more this year. You can make a contribution now (in 2019) and put it toward 2018, but make sure you make your move before April 15th. 

In other words, when you make an HSA contribution between January 1st and April 15th (or that years tax deadline), you have the option to apply the amount to the previous year.

4 Reasons to Utilize Prior Year Contributions

There are a few reasons you may want to make a prior year contribution.

  1. Play “Catch Up” – Regardless of your age, HSAs can serve as a way to pay for qualified health expenses and a way to save for retirement. Because HSAs can be carried with you as you go, as well as the accompanying tax benefits, they have become a secret retirement weapon! It makes sense to contribute as much as you can to your HSA, which makes the prior year contribution a handy way to increase your HSAs balance.
  2. Situations Change – While it makes sense to place money in your HSA as soon as you can for maximum growth time, we all know circumstances change. Since any money you contribute today helps you tomorrow, if you’ve found money at the beginning of the year you can use for your HSA, why not utilize a prior year contribution? 
  3. Tax Planning – The money you contribute to your HSA is tax-deductible, meaning, you don’t have to pay taxes on it. If you foresee having a tax burden, you can shelter some of your money by contributing it to an HSA.
  4. Maximize Your Healthcare Spending – Perhaps you’ve learned of a procedure you or a loved one needs later this year. By making a prior year contribution, you can maximize the tax benefits of the HSA and help pay for the associated treatment costs. 

Thanks to prior year contributions, you still have time to make a 2018 HSA contribution. Don’t delay, you only have until April 15th, and the clock is ticking.


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Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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