Blog
HSA

The Ultimate HSA Tax Form Checklist

2 min read • December 04, 2018
30 sec brief

If you have ever scrambled to file taxes, you know how important staying organized is. Digging through stacks of paperwork is never fun — especially with a deadline looming. If falling into old habits feels inevitable, it may be time for a change. For accounts like your health savings account (HSA), you need to stay...

If you have ever scrambled to file taxes, you know how important staying organized is. Digging through stacks of paperwork is never fun — especially with a deadline looming. If falling into old habits feels inevitable, it may be time for a change. For accounts like your health savings account (HSA), you need to stay on top of tax forms as they arrive.

Bonus: you will be more prepared and may feel less stressed later. These are the important forms to keep track of.

Watch for These Health Savings Account (HSA) Tax Dorms

Health savings accounts (HSAs) do more than offset your current health care costs. It’s a place for your money to grow tax-free for future medical expenses. Regardless of which option you choose, tracking with the proper tax forms is a must.

Here is a rundown of the most important ones:

  • Form W-2 – If an employer paid you a salary, wages, or deferred money into your HSA, you will see it on this form. By law, your company must send a copy of your W-2 by January 31. You can see your pre-tax HSA contributions — which are deductible — in Box 12.
  • Form 1099-SA – If you make any HSA withdrawals, your provider must send this form by January 31. The total amount will include times you swiped your HSA card or took reimbursements. If there were no withdrawals for the year, you won’t receive this form.
  • Form 5498-SA – If you add any money to your HSA, your provider must send this form by May 31. You receive this form later because you can contribute until the tax deadline. Your provider will also send a copy to the IRS.
  • Form 8889 – This form is part of your tax return. You submit Form 8889 with your 1040 to report the year’s HSA activity. This includes both contributions and distributions. If you spent HSA money on non-qualified medical expenses, you need to report it as a taxable income. You will also have to calculate a 20 percent penalty on that amount.
  • Form 5329 – If you added too much to your HSA for the year, you need to include Form 5329 with your tax return. There is a 6 percent tax on the excess amount until you take it out.

What about state HSA tax forms?

Your health savings account has three federal tax advantages. But not all states treat your HSA the same way. If you’re not sure, it’s worthwhile to speak with a local tax professional. It may help you avoid unnecessary state HSA taxes.

Don’t drop the ball on important HSA tax forms

It’s easy to overlook tax forms when your to-do list is already a mile long. But your health savings account (HSA) deserves a closer look before tax time. Contributions, deductions, and withdrawals all need a paper trail. These events can have a major impact on the year’s bottom line. By staying organized, you will stay one step ahead of what the IRS needs — this year and beyond.

Bonus – Download our free HSA Tax Checklist here.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered 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 investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

About the author
Kate Dore

Kate is a nationally recognized money coach and candidate for Certified Financial Planner™ Certification.

See Why Lively is the #1 Rated HSA Provider

Become lively member image