HSA and FSA 2025 updates have been announced. If you’re self-employed or running a small business in Bellevue, you know how important it is to make every dollar count. Between rising healthcare costs and unpredictable expenses, anything that helps you save on taxes while setting aside money for medical or dependent care is worth understanding. Learning how to leverage tax-advantaged health accounts is a great place to start.

That’s where the recent updates to Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) come in. For 2025, the IRS has raised contribution limits for both. This gives small business owners and solopreneurs a little more room to breathe—and a bit more to save.

What’s Changing in Tax-Advantaged Health Care Accounts in 2025

The IRS adjusts contribution caps each year to keep up with inflation, but 2025 brought a slightly bigger bump than usual.

Here’s a quick overview:

HSA contribution limits for 2025

• $4,300 for individuals (up from $4,150 in 2024)
• $8,550 for families (up from $8,300 in 2024)

FSA contribution limit for 2025

• $3,300 (up from $3,200 in 2024)

Dependent Care FSA cap

• $5,000 per household, or $2,500 if married and filing separately (unchanged but still valuable)

So, yes there is a higher cap for HSAs and FSAs in 2025. Dependent Care FSAs didn’t change, but these accounts create significant savings if you have children or other dependents who need care while you work.

Why HSA and FSA 2025 Updates Matter for Solopreneurs

One of the biggest misconceptions I hear from solo business owners is, “I can’t have an HSA because I don’t have employees.” That’s not true.

If you’re self-employed and have a high-deductible health plan (HDHP), you can open and fund an HSA on your own. The money you contribute reduces the amount of your taxable income, grows tax-free, and can be used anytime for qualified medical expenses—from prescriptions to dental work to vision care.

Think of it as a mini tax shelter that doubles as an emergency health fund.

As a Bellevue bookkeeper, I’ve seen small business clients use HSAs strategically—tucking away a few thousand each year and ending up with a healthy cushion they can use for future medical costs or even in retirement. I feel so strongly about it, I decided to write a whole blog on HSA and FSA 2025 updates!

What About FSAs and Dependent Care Accounts?

If you’re a business owner with employees—or if your spouse’s employer offers one—FSAs and Dependent Care FSAs are another smart tool.

FSAs let you set aside pre-tax money for things like co-pays, prescriptions, or medical supplies.
Dependent Care FSAs help offset child care or adult day care costs.

Even though Dependent Care FSAs didn’t get an increase this year, they remain a valuable way to manage out-of-pocket expenses while lowering your taxable income.

How to Decide Which Tax-Advantaged Health Account Fits You

For solopreneurs, an HSA is usually the smartest option since you own it—not your business—and it rolls over every year.

If you run a small business with staff, offering an FSA or Dependent Care FSA can be a great employee benefit. It shows your team that you care about their well-being—and it’s often deductible for the business, too.

HSA and FSA 2025 Updates FAQs

Q: Can I have both an HSA and an FSA?

A: Not usually. You can contribute to both accounts if your FSA limits coverage to dental and vision expenses (a “limited-purpose FSA”).

Q: Do HSA funds roll over each year?

A: Yes. That’s one of the biggest advantages of an HSA—there’s no “use it or lose it” rule like with FSAs.

Q: What if I’m not sure whether I qualify for an HSA?

A: The best advice is to set up a time to talk with your accountant or benefits provider. They can review your health plan and confirm eligibility before you open an account. If don’t have an accountant or a benefits provider, I am happy to refer you to someone who could answer your questions. I hope you have an accountant!

Making the Most of 2025’s Higher Limits

It’s easy to overlook small changes like these, but they can make a meaningful difference over time. A few hundred extra dollars invested in your HSA each year grows tax-free and helps cushion future medical costs.

Small business bookkeeping is all about tracking details that add up—and these limits are a good example. If you’re not sure which account makes sense for your business or how to record these contributions properly, I can help you sort it out. Book a complimentary 30-minute consultation, and we’ll make sure your 2025 plan helps you keep more of what you earn.

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Note: This blog article is for informational purposes only and should not be considered legal, financial, or tax advice. Please consult a qualified professional for personalized advice tailored to your business needs.