How to Use a Health Savings Account (HSA) to Save on Taxes in 2025

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As a business owner or real estate professional, finding smart ways to save on taxes is always top of mind. One tax-saving strategy that’s often overlooked, but incredibly powerful, is the Health Savings Account (HSA).

HSAs offer a triple tax advantage that can help you keep more of your income, prepare for unexpected medical expenses, and even build long-term wealth.

So what Is an HSA?

A Health Savings Account (HSA) is a personal savings account that allows you to set aside pre-tax money to cover qualified medical expenses.

The real power of an HSA lies in its triple tax benefit:

  1. Tax-deductible contributions – Reduce your taxable income.

  2. Tax-free growth – Funds can be invested and grow tax-deferred.

  3. Tax-free withdrawals – Use the funds for qualified healthcare costs without paying taxes.

You own the account—it’s not tied to an employer—and any unused funds roll over year after year. You don’t lose what you don’t use.

For 2025 you can contribute:

  • $4,150 if you’re covered under an individual high-deductible health plan

  • $8,300 if you have family coverage

  • + $1,000 if you’re age 55 or older (catch-up contribution)

The funds can be used for qualified medical expenses, including:

  • Doctor visits

  • Hospital services and surgeries

  • Lab work and imaging

  • Prescriptions

  • Dental procedures (cleanings, fillings, braces, etc.)

  • Vision care (exams, glasses, contacts)

  • Physical therapy

  • Chiropractic services

  • Mental health care

The only major restriction is that health insurance premiums generally aren’t eligible—unless they’re for COBRA, certain Medicare premiums, or long-term care insurance.

To contribute to an HSA in 2025, you must meet the following qualifications:

  • Be enrolled in a High-Deductible Health Plan (HDHP)

  • Minimum deductible of $1,650 (individual) or $3,300 (family)

  • Not be enrolled in Medicare

  • Not have other health insurance coverage (exceptions include dental, vision, accident, and disability insurance)

  • Not be claimed as a dependent on someone else’s tax return

If you meet these criteria, you normally can open an HSA at most banks or investment firms and start contributing right away.

When you contribute to an HSA the contributions are reported on IRS Form 8889. And if you don’t contribute by December 31 of one you typically can contribute up to April 15th of the following year.

Bottom Line is HSAs offer an easy win when it comes to tax planning, especially for self-employed professionals, investors, and high earners.

Whether you’re looking to reduce your tax liability today or build a healthcare fund for tomorrow, the HSA gives you the best of both worlds—tax savings now and financial peace of mind later.

If you need assistance with incorporating an HSA and other tax strategies, feel free to contact us HERE to schedule a call to discuss how we can assist.