Wednesday, April 9, 2014

HSA reporting

One more year filling in the taxes and this year, I happen to have an HSA. So, this is how I entered the info (disclaimer, not sure if right or wrong):
  • In the W2 the employer puts all contributions (employer and employee), although they call it in the wording "employer contributions". Kind of distracting...
  • You also should have got
  • Then you got to fill in form 8889. In my case, very simple, single, etc... I had to put:
    • Box 3, 5, 6 and 8: $3250. Basically max I could contribute.
    • Box 9, 11: what was showing on the W2. Contributions from your employer (which include yours done directly from payroll). In my case $2500. Check the form 5498-SA that you should have received from your broker.
    • That makes box 12 $750. I.e., that's what we could have contributed but we didn't.
    • And then on distributions (what you took from the HSA) I had 14a, 14c and 15 as $727. All mine are qualified medical expenses... You should have got form 1099 from your HSA broker. Just look it up...
Basically straightforward stuff. Do not duplicate the stuff on your W2. It is weird because somehow, I put $2k out of the $2.5k contributed, but I didn't have to write this anywhere... So, did the $500 from my employer also give me a tax break? I think basically so. As all this comes from the employer, it is already accounted for on the W2. Notice that on the 1040 nothing shows up on box 25... This box is only for contributions other than employer contributions.

One thing to notice is that as you fill in stuff in TaxAct or TurboTax, it considers the HSA contribution as income. Then, when you enter finally the HSA form, it removes them, giving you a break on the amount of tax your owe.

Other link...

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