I made a big tax mistake when I filed my taxes this year — but this time, I'm doing it again on purpose

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• Back in December 2023, I signed up for a health insurance plan that I thought included an HSA.
• HSAs are good for your taxes, so I was disappointed to discover my error at first.
• However, I'd rather give up the tax advantage of an HSA and keep my current health insurance plan.

My biggest tax mistake in 2024 had nothing to do with my tax return. This mistake didn't get me audited or raise red flags from my accountant. I made this mistake before the 2024 tax year even started, way back in December 2023, during health insurance open enrollment.

My biggest tax mistake of 2024 was failing to sign up for a health insurance plan that was eligible for a health savings account. Because of this mistake, I wasn't allowed to use one of the most sought-after tax deductions.

But here's the kicker: After seeing how this situation played out for my 2024 taxes, I'm deliberately making the same "mistake" again in 2025.

HSAs are often the best choice

Open enrollment is the special time of year when people can choose new health insurance plans. If you qualify, it's a great idea to choose a health insurance plan that is eligible for an HSA. Having an HSA is a sweet tax perk, because it gives you another option to sock away thousands of dollars of tax-deductible money.

For 2024 tax purposes, people with HSAs were allowed to contribute up to $4,150 (for self-only coverage) or $8,300 (for family coverage) of tax-deductible money to these special savings accounts.

And HSAs give you flexible options for how to use the money — these accounts are not "use it or lose it." You can use your HSA cash to pay for a wide range of healthcare costs at any time. Or you can invest your HSA dollars for the longer term and use the account for your future healthcare costs, or as an additional source of retirement savings.

How my big tax mistake happened

But there's a catch. In exchange for that sweet HSA tax break, the IRS expects HSA owners to have some skin in the game and pay for more of their own healthcare costs. HSA-eligible plans must be high-deductible health plans. For 2024, HDHPs were required to have minimum annual deductibles of $1,600 for self-only coverage and $3,200 for family coverage.

Way back in December 2023, when I was signing up for new health insurance for 2024, I thought I was signing up for an HSA-eligible plan. But I was wrong.

Here's what happened. I'm self-employed, and my family gets health insurance through the HealthCare.gov marketplace. During open enrollment, I was scrolling through the list of health insurance plans on HealthCare.gov that were available for my family to choose, and I clicked on one that I thought was HSA-eligible. It had a high deductible (more than $3,200 for 2024) and high out-of-pocket costs.

But I misunderstood some numbers and details in the fine print. The plan that I thought was HSA-eligible (because it had a high deductible and high out-of-pocket costs) actually was not eligible — because the plan's out-of-pocket costs were too high to qualify.

HSA-eligible plans for 2024 had maximum out-of-pocket costs (including the deductible) of $8,050 for self-only coverage, or $16,100 for family coverage. The plan I chose had maximum out-of-pocket costs of over $18,000 — not HSA-eligible.

How much my 2024 tax mistake cost me — and why I did it again

Because I accidentally chose the wrong health insurance plan, my family went through 2024 without being able to save tax-deductible money for healthcare expenses. I missed out on up to $8,300 of tax deductions that could have gone on my 2024 tax return. If you're in the 22% tax bracket, $8,300 of tax deductions equals about $1,826 of tax savings.

But here's what I learned from my 2024 tax mistake: I liked our non-HSA health insurance better than the other choices.

Our health insurance plan didn't give us HSA tax breaks, but it gave us a lower, affordable monthly premium. It allowed us to keep our favorite doctors and clinics in-network. Our health insurance company is easy to work with, and we understand which preventative care and screenings are covered. This plan is the best deal we can find.

For all of these reasons, I kept the same health insurance plan for 2025. This time, it wasn't a mistake, it was a choice. I knew going in that it wouldn't have an HSA. And our 2025 health insurance premium is $80 lower a month!

Weighing the options for health insurance is never easy, but if you make the same tax mistake that I did, don't beat yourself up about it. Peace of mind and consistency can be worth more than a tax break.