HSAs are tax-advantaged in three ways. First, personal HSA contributions using after-tax money may be federal income tax-deductible. If you have an HSA through your employer, you can make pre-tax payroll contributions—this type of contribution saves more on taxes than tax-deductible after-tax contributions.1 Second, spending your HSA money on qualified medical expenses is free of federal income taxes. Third, if you invest some or all of your HSA money, any growth is also tax-free.