2. Get Your Tax Forms Together to File by July 15
There are certain tax forms you will need if you are filing with an HSA. We will go over each of these forms briefly here to help you understand what forms you require and why.
W-2 – Wage and Tax Statements
By January 31, you should have received your W-2 form from your employer stating your total income for the year and taxes withheld. If you have an HSA, you should check Box 12-W on the form to see what pre-tax HSA contributions were made to your account by you and your employer. This contribution total may be used to complete Form 8889 (we’ll get to that one). Only contributions made by you or your employer through payroll will appear on your W-2.
Form 1099-SA – Distributions from an HSA
By January 31, you should have also received Form 1099-SA from your HSA custodian stating total distributions (money you withdrew) from your HSA for the year. This includes any HSA funds you spent on medical expenses with a payment card and money withdrawn through online reimbursement requests. If you did not use any HSA funds, you will not receive Form 1099-SA. It is possible that you may only receive this form electronically. (If ConnectYourCare is your HSA custodian, you can access this form online by logging into your account and selecting “View HSA Tax Information” under the “I want to” dropdown menu.)
IRS Form 1040 (long form) – U.S. Individual Income Tax Return
HSA participants need to use the 1040 long form to file taxes, not the 1040 EZ form.
IRS Form 8889 – Health Savings Accounts (HSAs)
Form 8889 reports all contributions to and distributions from your HSA for the tax year. This form also allows you to report if any of your HSA funds were used for non-qualified medical expenses. Refer to the IRS Instructions for Form 8889 or contact your tax advisor for details on how to complete Form 8889.
IRS Form 5329 – Additional Taxes on Qualified Plans and Other Tax-Favored Accounts
If applicable, you need to submit this form, along with Form 1040, to report excess HSA contributions that are not withdrawn from your HSA prior to the tax filing deadline. There are many reasons that you may have exceeded the IRS contribution limits for an HSA, including an error in filing, rollover from the previous year, and a shortened plan year (if you signed up for the HSA halfway through the year but still contributed up to the limit). Consult your tax advisor if you have questions about this form.