ExpertMedium1 markMultiple Choice
CPA · Question 19 · Area I: Individual Compliance and Planning
A 50-year-old taxpayer has a High Deductible Health Plan (HDHP) for self-only coverage. Assume the maximum HSA contribution limit is $4,150. The taxpayer contributes $2,000. Their employer contributes $1,000. What is the maximum additional amount the taxpayer can contribute to the HSA for the year?
A 50-year-old taxpayer has a High Deductible Health Plan (HDHP) for self-only coverage. Assume the maximum HSA contribution limit is $4,150. The taxpayer contributes $2,000. Their employer contributes $1,000. What is the maximum additional amount the taxpayer can contribute to the HSA for the year?
Answer options:
A.
$2,150
B.
$1,150
C.
$3,150
D.
$4,150
How to approach this question
HSA Limit applies to Total Contributions (Employer + Employee). Remaining space = Limit - Employer Contrib - Employee Contrib.
Full Answer
B.$1,150✓ Correct
B
IRC §223. The limit applies to the aggregate contributions. $4,150 Limit - $1,000 Employer - $2,000 Employee = $1,150 remaining capacity.
Common mistakes
Thinking the limit applies separately to employer and employee.
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