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Taxes for a Health Savings Account

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  • 04-08-2014, 07:40 AM
    c627627
    Taxes for a Health Savings Account
    Company puts in $1000 per year into HSA account.
    Account was opened with a $100 personal deposit.

    There was no info on the W2 about the HSA $ the company put in, it was separate from salary.
    Does anything have to be reported on the 1040 form about this?
    Which line of the 1040 form would the $100 put in go on, if any, if standard deductions were taken?


    I understand that if instead of paying for qualified medical expenses out of the HSA account, you pay out of your own personal regular checking account... then you can reimburse yourself out of the HSA account later for that amount.

    How long does a person have to reimburse themselves, is there a time limit? Are there forms to fill out, I assume you can't just write yourself a check from the HSA account?
  • 04-08-2014, 07:49 AM
    llworking
    Re: Hsa Health Savings Account
    Quote:

    Quoting c627627
    View Post
    Company puts in $1000 per year into HSA account.
    Account was opened with a $100 personal deposit.

    There was no info on the W2 about the HSA $ the company put in, it was separate from salary.
    Does anything have to be reported on the 1040 form about this?
    Which line of the 1040 form would the $100 put in go on, if any, if standard deductions were taken?


    I understand that if instead of paying for qualified medical expenses out of the HSA account, you pay out of your own personal regular checking account... then you can reimburse yourself out of the HSA account later for that amount.

    How long does a person have to reimburse themselves, is there a time limit? Are there forms to fill out, I assume you can't just write yourself a check from the HSA account?

    HSA information gets entered on form 8889 and then transfers to the 1040 if anything needs to be transferred. Generally nothing gets transferred to the 1040 when its an employer sponsored plan and the money was used for unreimbursed medical expenses.
  • 04-08-2014, 09:11 AM
    c627627
    Re: Hsa Health Savings Account
    Thanks for that. I thought that nothing would generally get transferred as you said.


    What about the $100 of personal funds used to open the account, is that something that gets entered on a 1040 form if standard deductions were taken?
    What if people put in more of their personal funds into their HSA accounts, do they enter those amounts anywhere on 1040, if standard deduction were taken?
  • 04-08-2014, 11:36 AM
    llworking
    Re: Hsa Health Savings Account
    Quote:

    Quoting c627627
    View Post
    Thanks for that. I thought that nothing would generally get transferred as you said.


    What about the $100 of personal funds used to open the account, is that something that gets entered on a 1040 form if standard deductions were taken?
    What if people put in more of their personal funds into their HSA accounts, do they enter those amounts anywhere on 1040, if standard deduction were taken?

    Again, that would go on form 8889 and would transfer to the 1040 as an above the line deduction.
  • 04-08-2014, 12:31 PM
    jk
    Re: Hsa Health Savings Account
    Are you putting no more than the annual limit into the account (that would include both your employers contribution and your individual contribution) ($3250 for an individual, $6450 for a family, and no more than $1000 for a catch up payment if you are 55 or over for 2013)


    Quote:

    I understand that if instead of paying for qualified medical expenses out of the HSA account, you pay out of your own personal regular checking account... then you can reimburse yourself out of the HSA account later for that amount.
    check with the plan administrator as to how to make a withdrawal. Regardless of how it is withdrawn, if the money is used for non-covered expenses, you get hit with a penalty (20%) and taxes that were not paid on the money. You would have to be able to prove the withdrawals were for covered expenses so keep receipts.



    Quote:

    How long does a person have to reimburse themselves, is there a time limit?
    llworking can answer this better than I but I suspect the reimbursement has to be in the tax year you paid the covered expense.

    Quote:

    Are there forms to fill out, I assume you can't just write yourself a check from the HSA account?
    It varies but essentially, yes, it would not be much different than writing yourself a check. There is no approval process for withdrawing the funds. That is why you need to keep proof of the expenditure as you are who is responsible for withdrawing money for covered expenses separate from withdrawals that are not used for such a purpose. Check with whomever holds the account or administers it.
  • 04-08-2014, 02:05 PM
    c627627
    Re: Hsa Health Savings Account
    Thanks a bunch. Filling out Form 8889 for Health Savings Accounts (HSAs), would have resulted in placing $100 on Form 1040, line 25, after completing separate Form 8889. This would have yiedled a relatively small increase in Tax Refund.


    But this info is great because if you have a big medical expense, best deposit as much as you can into your HSA account to yield a bigger Tax Refund when you file. So it sounds like up to $3250 for individual can be deposited. Not needed for few medical expenses but if people have something they know they will have expenses for (pregnancy maybe?) then sounds like they should find out how much all that is going to cost then deposit into HSA up to $3250 then just turn around and pay from HSA account for it.
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