Health Savings Accounts (HSAs) can be a valuable tool for freelancers and self-employed individuals to save for medical expenses while also enjoying tax benefits. An HSA is a savings account that allows individuals to set aside pre-tax dollars to pay for qualified medical expenses. Contributions to an HSA are tax-deductible, and the funds in the account can be invested and grow tax-free.

For example, a self-employed individual who expects to have significant medical expenses throughout the year can contribute to an HSA to set aside funds specifically for those costs. This can help them budget for healthcare expenses while also reducing their taxable income.

It's important for freelancers and self-employed individuals to understand the eligibility criteria and contribution limits for HSAs. As of 2021, individuals with a high-deductible health plan (HDHP) are generally eligible to open and contribute to an HSA. The contribution limits for 2021 are $3,600 for individuals and $7,200 for families, with an additional $1,000 catch-up contribution allowed for individuals aged 55 and older.

References:

1. IRS Publication 969: Health Savings Accounts and Other Tax-Favored Health Plans
2. Healthcare.gov: Health Savings Accounts (HSAs)