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How To Get Tax Benefits from Manual HSA Contributions

Both payroll and manual contributions made to your HSA throughout the tax year offer the same tax benefits. Here's what you need to know to maximize your those benefits, and instructions for making a manual contribution to your account.

One of the biggest reasons to take advantage of health savings accounts (HSAs) is the tax benefits. HSAs feature a triple tax benefit that consists of:

  • Reduce taxable income - HSA contributions through payroll are made pre-tax, which lowers tax liability on paychecks. Manual contributions are tax deductible when filing taxes each year.
  • Tax-free earnings - Interest growth earned on HSA funds is never taxed.
  • Tax-free distributions - HSA funds are not taxed when used for eligible expenses. 

If you have an HSA through your job, you may choose to make HSA contributions automatically through your paychecks. It's a great way to ensure your HSA receives regular funding. However, if you don't reach the HSA annual max contribution through your payroll contributions, it may be beneficial to make manual contributions to your HSA to get a larger tax break - or simply to enjoy a larger account balance. You'll still receive all the same tax benefits from a manual contribution as you would from payroll contributions.

Further will help make sure you have the documentation you need to report all of your contributions, both automatic payroll and manual contributions. We will send you Form 5498-SA each year, which reports all of your HSA contributions throughout the tax year. You can also use your tax year statement on the Member Portal to ensure the reporting is accurate. Since the tax year extends into April each year instead of ending on December 31st, Further will send you a revised 5498-SA by May 31st if you make any contributions that need to be reflected on the form.

When you have collected your documentation, you will need to fill out Form 8889 and attach it to Form 1040. Form 8889 reports all of your HSA contributions and withdrawals to the IRS to ensure you receive your appropriate tax benefits. If you choose to use tax preparation services, many will fill this form out for you, if you can provide your contribution and withdrawal information for the year. 

For more on tax forms, see What Tax Forms Will I Need For My HSA?

HSA contribution limits 

The table below displays the current HSA contribution limits. Current contribution information can be found on the U.S. Department of Treasury website at treas.gov.

Tax Year Individual Coverage Limits Family Coverage Limits
2020  $3,550  $7,100 
2021 not yet announced not yet announced

Once age 55, members can contribute an additional $1,000 towards their HSA (either individual and family coverage). 

How to make a manual contribution

One-time deposits can be made from your personal bank account into your HSA account. You can make online contributions anytime by authorizing withdrawals from your savings or checking account or mailing your contributions to Further. 

Make a one-time deposit on www.hellofurther.com

  1. Sign in at www.hellofurther.com.
  2. Choose Make a Deposit from the I Want To... menu. 
  3. Click Make a One-Time Deposit.
  4. Enter the amount you want to transfer and click Next.
  5. Select the bank account you want to transfer the money from.
  6. Enter the date that the transfer will be posted.
  7. Enter the tax year for the transfer.
  8. Agree to the terms and conditions for making a deposit.
  9. Click Make Deposit.  

Make a one-time deposit using the mobile app

  1. Tap the menu button in the top left corner.
  2. Tap Payment and Banking.
  3. Tap Make a One-Time Deposit.
  4. Enter the amount you want to transfer.
  5. Select the bank account you want to transfer the money from.
  6. Enter the date that the transfer will be posted.
  7. Enter the tax year for the transfer.
  8. Tap Make Deposit.

Schedule a recurring monthly deposit

You can set up reoccurring deposits from your personal bank account. You can choose both the amount and the date that deposits are added to your HSA each month. 

Schedule a recurring monthly deposit on www.hellofurther.com

  1. Sign in at www.hellofurther.com.
  2. Choose Make a Deposit from the I Want To... menu. 
  3. Click Set up a Recurring Deposit.
  4. Enter the amount you want to transfer and click Next.
  5. Select the bank account you want to transfer the money from.
  6. Choose which day of the month you'd like the deposit to be initiated.
  7. Agree to the terms and conditions for making a deposit.
  8. Click Make Deposit.  

Schedule a recurring monthly deposit using the mobile app

  1. Tap the menu button in the top left corner.
  2. Tap Payment and Banking.
  3. Tap Schedule a Monthly Deposit
  4. Enter the amount you want to transfer.
  5. Select the bank account you want to transfer the money from.
  6. Enter the date that the transfer will be posted.
  7. Enter the tax year for the transfer.
  8. Tap Make Deposit.