Question

Ruth, a 58-year-old taxpayer, has a self-only health savings account (HSA) and was enrolled in a high-deductible health plan (HDHP) during 2018. Ruth's employer made a $1,000 contribution to her HSA. If Ruth chooses to make an additional contribution for the tax year, what is the maximum amount she may contribute?a. $1,000b. $2,400c. $3,400d. $4,400

Answer 1

Answer:

(A) $1,000

Explanation:

Health Savings Account (HSA) is an account that offers tax advantages to those individuals who are covered under high deductible health plans(HDHPs).

Both Employers and Employees make contributions to such an account.

Under the laws, the maximum contribution allowable is $3400 by both employers and employees.

Such contributions can be used for qualified medical expenses.

Individuals who are above 55 years of age can contribute an additional $1000 per person per year as per the law which can be of much help to early retirees.

Hence, Ruth is allowed to make an additional contribution of $1,000.