HSA Tax Savings Calculator

How to calculate HSA Tax Savings Calculator?

The calculator estimates the tax benefit of pre-tax HSA contributions by combining your marginal federal, state, and FICA tax rates and applying them to your annual contribution.

Key formula:

tax_savings = annual_contribution × (federal_rate + state_rate + fica_rate)

Using the HSA Tax Savings Calculator calculator: an example

Example values used below: annual contribution $3,850, federal 22%, state 5%, FICA 7.65%.

Step-by-step calculation:

• Start with the annual HSA contribution: $3,850.
• Convert each tax rate to decimal and sum: 0.22 (federal) + 0.05 (state) + 0.0765 (FICA) = 0.3465.
• Multiply: $3,850 × 0.3465 ≈ $1,334 — this is the estimated annual tax savings.
• Adjust contribution or rates to compare different scenarios.

Frequently Asked Questions

Do HSA contributions always reduce FICA taxes?

Contributions made through payroll are typically pre-tax for FICA, but direct deposits or after-tax contributions may not reduce FICA. Check your payroll method.

Does the calculator include employer HSA contributions?

Employer contributions are generally tax-free to you. This calculator focuses on the tax impact of your own contributions; include employer amounts separately if you want a full picture.

What happens if I exceed the annual HSA limit?

Excess contributions may be subject to income tax and penalties. Use current IRS contribution limits for the applicable tax year when estimating savings.