HSA vs FSA Tax Savings Calculator

Both Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)help you save money on healthcare by allowing pre-tax contributions. But they work very differently— and choosing the wrong one could cost you hundreds or even thousands of dollars.

An HSA is like a tax-advantaged investment account that happens to be for healthcare. Your money rolls over forever, can be invested for growth, and travels with you when you change jobs. The catch? You need a High Deductible Health Plan (HDHP) to qualify.

An FSA is a simpler "use-it-or-lose-it" account tied to your employer. You set aside pre-tax money for the year, but most unused funds are forfeited at year-end. The upside? FSAs work with any health plan and your full contribution is available on day one.

This calculator helps you compare the actual tax savings and long-term value of HSAs vs FSAs based on your specific tax situation, contribution levels, and expected healthcare spending.

Health Savings Account (HSA)

HSAs offer the "triple tax advantage"—the only account type in the U.S. tax code with this benefit:

• Tax-Free Contributions: Contributions reduce your taxable income
• Tax-Free Growth: Investment earnings are never taxed
• Tax-Free Withdrawals: Qualified medical expenses paid tax-free

2024/2025 HSA Contribution Limits

Note: Contribution limits are adjusted annually. Verify current limits at irs.gov.

Flexible Spending Account (FSA)

• Pre-Tax Contributions: Reduce taxable income just like HSA
• Use-It-Or-Lose-It: Most unused funds forfeited at year-end
• Employer-Tied: Cannot take FSA when you leave your job
• Full Amount Available Day 1: Access your full annual election immediately
• 2024/2025 Limit: $3,200 (2024) / $3,300 (2025); verify current limits at irs.gov
• Carryover Option: Some plans allow up to $640 (2025) carryover; verify current limits at irs.gov

Side-by-Side Comparison

Step 1: Select Mode
Choose "One-Year Comparison" for annual tax savings, "Multi-Year Projection" for long-term HSA growth, or "What-If Scenarios" to compare different contribution strategies.

Step 2: Enter Your Tax Rates
Input your federal marginal rate (10-37%), state rate (0-13%+), and payroll rate (typically 7.65%). These determine how much you save on each pre-tax dollar.

Step 3: Enter HSA Details
Input your planned HSA contribution, any employer contributions, and expected healthcare spending this year. For family coverage, limits are higher.

Step 4: Enter FSA Details
Input your planned FSA contribution, expected spending, and any carryover allowed by your plan.

Step 5: Review Results
See tax savings for each account, potential FSA forfeiture, HSA unspent balance that carries over, and the net benefit comparison.

Tax Savings Formula

Tax Savings = Contribution × (Federal Rate + State Rate + Payroll Rate)

Example: $3,000 contribution at 22% federal + 5% state + 7.65% FICA = $3,000 × 34.65% = $1,039.50 saved

HSA Net Benefit

HSA Net Benefit = Tax Savings + Unspent Balance (rollover) + Employer Contribution

HSA funds that aren't spent this year become savings for future healthcare costs or retirement.

FSA Net Benefit

FSA Net Benefit = Tax Savings − Forfeited Funds

Forfeited = Contribution − Spending − Carryover Allowed

If you contribute $3,000 but only spend $2,000 with no carryover, you forfeit $1,000—wiping out most of your tax savings.

Long-Term HSA Growth

HSA funds can be invested. Assuming a 7% annual return:

Future Value = Contribution × (1 + Growth Rate)^Years

$3,000/year invested for 20 years at 7% = approximately $131,000 (tax-free for medical expenses, or taxable like a 401k after age 65).

1. Choosing During Open Enrollment

Use this calculator before open enrollment to decide between HDHP+HSA or traditional plan+FSA. Compare total costs including premiums, deductibles, and tax savings.

2. Deciding How Much to Contribute to FSA

FSA forfeiture risk means you should only contribute what you're confident you'll spend. Estimate dental work, prescriptions, glasses, and predictable medical costs.

3. Maximizing HSA for Retirement

HSAs are the only "triple tax-free" accounts. If you can afford to max out contributions and pay healthcare out-of-pocket, your HSA becomes a powerful retirement vehicle.

4. Family Coverage Decisions

Family HSA limits are much higher ($8,550 in 2025; verify current limits at irs.gov). Compare the tax savings of maxing out family coverage vs. self-only based on your actual healthcare needs.

5. Employer Contribution Impact

Many employers contribute to HSAs (free money!). Factor in employer contributions when comparing HSA vs FSA—this often tips the scales heavily toward HSA.

6. Planning for Expected Medical Expenses

Having a baby? Planning surgery? Known healthcare costs make FSA predictable. But if expenses are uncertain, HSA's rollover feature reduces forfeiture risk.

• ❌ Over-contributing to FSA and forfeiting money

  The most common FSA mistake. Only contribute what you're certain you'll spend. Unused funds up to the annual carryover limit may carry over (verify at irs.gov), but most plans forfeit the rest.

• ❌ Not contributing to HSA because "I don't have medical expenses"

  HSA funds don't expire! Contribute the max, invest it, and let it grow. Use it decades later for retirement healthcare or withdraw penalty-free after 65.

• ❌ Forgetting payroll tax savings (FICA)

  Both HSA and FSA contributions made through payroll avoid 7.65% FICA taxes on top of income tax savings. That's an extra ~$230 saved on a $3,000 contribution.

• ❌ Trying to have both HSA and general-purpose FSA

  You generally can't have both. However, you CAN have an HSA with a Limited-Purpose FSA (dental/vision only) or Dependent Care FSA.

• ❌ Not investing HSA funds

  Most HSA providers offer investment options once you hit a threshold (~$1,000-2,000). Leaving money in cash earns near-zero interest—invest for long-term growth.

• ❌ Using HSA for non-qualified expenses before age 65

  Non-qualified withdrawals before 65 face income tax PLUS a 20% penalty. After 65, non-medical withdrawals are taxed like a traditional IRA (no penalty).

• 💡 Use HSA as a "stealth IRA" for retirement

  Max out HSA, invest aggressively, pay current medical expenses out-of-pocket, and let the HSA grow. After 65, it works like a traditional IRA for any purpose.

• 💡 Keep receipts forever for tax-free HSA reimbursement

  There's no deadline to reimburse yourself from HSA. Pay for a $1,000 expense today out of pocket, reimburse yourself tax-free from HSA in 20 years after growth.

• 💡 Time FSA spending strategically

  If your plan year ends December 31 and you have unused FSA funds, stock up on eligible items: glasses, contacts, first aid supplies, sunscreen, and OTC medicines.

• 💡 Coordinate spousal accounts

  If one spouse has HSA and another has FSA, coordinate to maximize benefits. The FSA-holder should cover predictable expenses; HSA-holder invests for growth.

• 💡 Use catch-up contributions at 55+

  At age 55, you can contribute an extra $1,000/year to HSA. If both spouses are 55+, each can make catch-up contributions to their own HSA.

• 💡 Consider Limited-Purpose FSA alongside HSA

  If your employer offers it, use LPFSA for dental/vision (predictable costs) while maximizing HSA contributions for investment growth.