What is the maximum contribution amount for a Catastrophe Savings Account for a taxpayer with a qualified deductible over $1,000?

For taxpayers with a qualified deductible exceeding $1,000, the maximum contribution amount for a Catastrophe Savings Account is set at either $15,000 or twice the qualified deductible amount. This provision is designed to encourage taxpayers to save for potential catastrophic events, such as natural disasters, by allowing them to contribute a significant amount that can be used to cover their deductible costs when needed.

This maximum contribution limit reflects the intention to provide a robust financial vehicle for individuals to prepare adequately for emergencies, thus creating a safety net. It incentivizes taxpayers to save more by offering a flexible ceiling based on their actual deductible, aligning the savings potential with their specific insurance circumstances.

In contrast, other choices do not align with the established caps for such accounts, reflecting either lower limits or misinterpretations of the allowable contributions based on deductible amounts.