What is Tax Form 5498?

HSAs and other health focused savings account have major tax benefits - but that also means that there are certain forms that you need to be aware of when filing your taxes. Tax Form 5498 is one of those forms you may be wondering about.

If you’re the owner of an Health Savings Account, sometime in May (at least by June 1st) you will receive IRS Form 5498 from the trustee or administrator of your account. You may panic, because it looks like something that you should have submitted with your income taxes. Fear not, this form is only for your informational purposes.

What this form is used for

To put it succinctly, tax form 5498 shows you all of the contributions made to your HSA. This form is what the trustee or administrator of your HSA (as well as Archer MSA and MA MSA) uses to report all of your contributions including the ones made by: you, your employer, your spouse or other loved one, or transfers from IRAs and rollovers from the previous year.

Here is a box-by-box guide to what you’ll see on your personal tax form 5498:

  • Box 1: Contributions to an Archer MSA that count towards the previous tax year's contribution limits. If you don’t own an Archer MSA that is also administered by this trustee or administrator, this box will be blank.
  • Box 2: This box shows all contributions made in the past calendar year to your HSA, and includes any qualified distributions from your IRA to fund your HSA. It also includes any contributions made in the past year which were applied to the previous tax year.
  • Box 3: Your 5498-SA is distributed after tax day so it reflects all contributions made in the current calendar year for the previous tax year.
  • Box 4: Any rollover contributions from the previous year that were received by the administrator in in the current year.
  • Box 5: The fair market value of your HSA, Archer MSA or MA MSA.
  • Box 6: The correct boxes should be checked (HSA, Archer MSA, MA MSA).

Checking for errors

The first thing you should do after receiving this form is to ensure all of the information on it is accurate. Why? Because this is the information that the trustee or administrator of your HSA has reported to the IRS. If it’s inaccurate or different than what you reported on your tax return, it could cause you massive headaches. If you see a discrepancy between what you reported on your taxes (Form 8889) and what you see on Form 5498, you should contact your trustee or administrator immediately to make sure all of your contributions have been recorded and coded correctly.

Be mindful of over-contributing to your HSA. If you contributed more than the HSA contribution limits set by the IRS for that year, but those excess contributions were repaid to you by your HSA trustee or administrator, they should not be included in your contribution amount. Since you have to pay income taxes on any excess contributions, in addition to a 6% tax penalty, it’s important that the number reported in Box 2 only reflects the money you left in the account.

If it was your HSA trustee or administrator who made the error, they will issue you a Corrected Form 5498. If the error was on your end, you will need to file an amended tax return.

If, after checking the information, everything looks accurate, you should keep this form with your other tax documents in the event you face any other inquiries in the future.

Unusual circumstances and what to do

  • You took a total distribution (meaning you completely emptied your HSA) in the year and made zero contributions to the account. If this was the case, your trustee or administrator is not required to send you a Form 5498.

  • Your spouse was the owner of an HSA and passed away in the previous year. If this occurred, you are the new owner of the HSA and will receive a Form 5498 from the HSA trustee or administrator. Something to note: if you are the designated beneficiary of an HSA but are not the deceased owner’s spouse, then the account ceases to become an HSA and you won’t receive a Form 5498.

Form 5498 is referred to as a tax form but it’s simply for your information and isn’t needed for you to file your taxes. However, it is important that it displays accurate information, for if it doesn’t, it could affect your tax liabilities. If you have any questions after receiving your Form 5498, reach out to your trustee or administrator or a tax accountant.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

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