Health savings accounts (HSAs) are fantastic tools for money management and financial growth. They're accounts that allow you to save money for eligible medical expenses. However, because they offer several tax advantages, tax season can get more complex when you have an HSA. Get ahead of tax season with HSA tax forms! Click here to visit this website and access essential documents for managing your healthcare savings effortlessly.
The IRS states that HSA deductions and withdrawals are reportable transactions. It doesn't matter whether your contributions are from you or an employer. It also doesn't matter if you withdraw for qualified expenses. You must report all contributions and withdrawals.
But what HSA tax forms do you need?
1099-SA
The first form you should give to your tax advisor is Form 1099-SA. This document typically comes from your HSA administrator. It's the bank's or institution's responsibility to send this document to you early in the year. Usually, it's available for download from the administrator's online portal.
Form 1099-SA reports all the withdrawals you made from your HSA during the year.
5498-SA
You should get Form 5498-SA alongside Form 1099-SA. This document reports all the contributions you made to your HSA. Contributions up to the annual limit are tax-free when made through an employer. If you contribute funds yourself, they're tax-deductible. Therefore, you want this form to ensure you're getting all the benefits of your HSA.
Completing Form 8889
Once you have Forms 1099-SA and 5498-SA, you have what you need to complete your taxes. You must contact your administrator if you are still waiting to receive those documents by June. Sometimes, delays can happen. But you need those forms to file your taxes. So, it's wise to request an extension with the IRS if necessary.
Your tax advisor will use HSA tax forms 1099-SA and 5498-SA to complete Form 8889. Form 8889 will join Form 1040 when you file.
This document provides all the necessary information about HSA contributions and deductions to the IRS. It's for reporting contributions made independently and through your employer. It also helps to figure out your HSA deductions. If you're no longer eligible for an HSA, the document will also help you determine what you must include as additional income and what extra taxes you must pay.
Read a similar article about what is an FSA here at this page.