HSA Tax Documents and Your Health Savings Account

HSAs are a great way to save for medical expenses, but understanding the tax documents involved can be overwhelming. You'll need to keep track of your HSA contribution receipts to claim the tax deduction on your return.

HSAs are tax-free, meaning you won't pay income tax on the contributions or earnings. This is a big advantage over traditional health insurance plans.

To qualify for an HSA, you must have a high-deductible health plan (HDHP). This means your health insurance plan must have a minimum deductible amount set by the IRS.

HSAs are designed to be used for qualified medical expenses, which include things like doctor visits, prescriptions, and hospital stays.

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If you have an HSA, you'll need to complete and file IRS Form 8889 with your tax return if you contribute to it or take a distribution. This form is used to report your HSA contributions, distributions, and tax deductions.

To complete Form 8889, you'll need to gather information from your HSA account statements, which can be found online or through WEX's website. Specifically, you'll need to look at Box 12, Code W on your W-2, which includes both your employer's contribution to your HSA and your own contributions through payroll deductions.

You'll also need to report any distributions made from your HSA on Form 8889, which can be found on your Form 1099-SA. This form reports the total distributions made from your HSA during the tax year, including any purchases or withdrawals using HSA funds.

If you have a Medical Savings Account (MSA), you'll also need to report your MSA contributions and distributions on IRS Form 8853.

You can find your tax statements on WEX's website, including your Form 1099-SA and 5498-SA, which indicate your HSA contributions made for the current tax year. These forms are used to complete IRS Form 8889.

Here's a summary of the key tax documents you'll need to file with your HSA:

You have until April 15, 2024, to make contributions to your HSA for 2023, up to the applicable annual limit, so be sure to check your account statements and make any necessary contributions before then.

An HSA is offered with a qualified High-Deductible Health Plan (HDHP) and the account is opened through the HSA provider chosen by your employer.

Money is deposited from your paycheck into the account before it is taxed, so you don’t pay taxes on those wages. This is a great perk, as it can help you save money in the long run.

You can continue contributing to your HSA if you leave your job, change jobs, or retire, which gives you more flexibility with your healthcare expenses.

Some HSAs include a debit card that allows you to pay for qualified healthcare expenses at the time of service. This can make it easier to manage your expenses and avoid overspending.

Money in your HSA may earn interest, and when your account reaches a minimum balance, you may be able to open a tax-advantaged investment account. This can help your savings grow over time.

You can withdraw the money in your HSA at age 65, but you’ll need to pay income taxes on it. If you withdraw it under age 65, the money is subject to income tax and may also be subject to a 20% penalty tax.

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You can pay for qualified medical expenses in a tax-advantaged way with a health savings account (HSA).

An HSA allows you to save money for medical expenses in a tax-advantaged way, which means you won't have to pay taxes on the money you contribute or the interest it earns.

This can be a big benefit for people who have high medical expenses, as it can help them save more money for those expenses without having to pay taxes on it.

With an HSA, you can pay for qualified medical expenses without having to pay taxes on them, which can help you save even more money.

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Keeping track of your HSA records is crucial in case of an IRS audit. You should keep all receipts and records for qualified health expenses paid with your HSA funds for your own records.

You don't need to submit these receipts and records to WEX or the IRS with your tax return. This is a relief, as it can help declutter your paperwork.

You can store digital images of your receipts by utilizing the online Expense Tracker feature on WEX's website at www.benefit-info.com/iu/. This can be a convenient way to keep your records organized.

To access the Expense Tracker feature, simply visit the website and follow the instructions.

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You'll receive two important forms from HSA Bank: IRS Form 1099-SA and IRS Form 5498-SA. IRS Form 1099-SA reports any distributions made from your HSA during the tax year.

The IRS requires HSA Bank to issue Form 1099-SA if you made a distribution from your HSA. You can find your tax statements on HSA Bank's website by selecting Accounts, then Statements.

Box 1 of the 1099-SA reports the total distributions made from your HSA during the tax year. This includes any purchase or withdrawal using HSA funds.

You'll also receive a Form 5498-SA, which indicates your HSA contributions made for the current tax year. This information is used to complete IRS Form 8889.

Form 8889 is where you record your HSA contributions, distributions, and tax deductions. You can find the HSA contribution information in Box 12, Code W on your W-2.

Line 9 of Form 8889 is where you record any contributions made to your HSA account via payroll contributions. This information can be found on your W-2, box 12, code W.

You'll also need to report distributions from your HSA on Form 8889 and submit it with your annual income tax return.

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