Ace the Certified Payroll Pro Test 2025 – Payroll Masters, Your Time to Shine!

The maximum contribution limit for a Health Savings Account (HSA) in 2023 is indeed $3,850 for individual coverage and $7,750 for family coverage. These limits are set by the IRS and are adjusted annually to reflect inflation and healthcare cost trends.

In 2023, the individual contribution limit of $3,850 aligns with the goal of encouraging individuals with high-deductible health plans (HDHPs) to save for medical expenses. Similarly, the family contribution limit of $7,750 reflects a need for families to cover a broader range of healthcare expenses that may arise. Additionally, individuals aged 55 and older can make "catch-up" contributions of an extra $1,000 to their HSA to help save for medical costs as they approach retirement.

The other options provided do not align with the established limits for HSA contributions in 2023, making them incorrect. Familiarity with the annual contribution limits is essential for ensuring compliance and maximizing tax advantages associated with HSAs, thus reinforcing the accuracy of the correct choice.