Filing Taxes with a Health Savings Account (HSA): Part One


You may have a question or two about Health Savings Accounts (HSAs) and taxes – it’s that time of the year!

One of the keys to receive the maximum benefit is to file taxes correctly. Everyone’s tax situation is different. Our first suggestion for people seeking advice is to go through HSA tax requirements with a tax advisor. Hopefully this series helps people ask the right questions when doing this.

Employees: Make sure you have all the right documents

Your W-2

You should have this before you file your taxes.  If you don’t know what a W-2 is, or if you are filing taxes before you receive yours, I think you are beyond our help.  (See more about W-2s here.)

In regards to an HSA, the important part of the W-2 is in box 12.  The section coded W in box 12 indicates how much money your employer contributed to your HSA through payroll.  You will enter this amount on Form 8889.

Form 8889

This form is required of all HSA account holders regardless of income.  The IRS publishes this form, which you will fill out with all information the IRS needs to know about your HSA.  This form will require you to indicate:

  • your contributions to your HSA and how they were made (basically the amount on your W-2 plus any non-payroll contributions you made on your own)
  • your distributions from your HSA
  • any penalties you might need to pay

Form 1099-sa

This form is not required to file your taxes.  It is simply a summary of all the money that was spent from your HSA in the previous tax year.  Your financial custodian that holds the money for your HSA will usually send the form at the end of January/beginning of February.

Form 5498-sa

This form is also not required to file taxes.  It is a summary of contributions to your HSA.  Again, it is sent from your HSA custodian by May 31st, although some custodians will send a preliminary copy the same time they send your Form 1099-sa. If you only contributed through payroll deductions, just use the amount on your W-2. If you contributed in multiple ways, your HSA provider can give you this amount.

Please see part two of this series for info that will help answer some common questions about filing taxes with HSAs.

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