HSA information

[gman]

Taxpayer's w-2 has code w and receives form 1099-SA along with form 5498. Distributions reported on form 8889 along with contributions.
How are contributions determined. Form 5498 shows total contributions, but I assume that includes employers share also.
5498 shows total contributions 1250.00
1099sa shows distributions 50.00
and w-2 code w shows 269.00

[kathyc2]

Is the 5498 for 2013? Since taxpayers have until 4/15 to make PY contributions, the 5498's are generally mailed around May for the PY.

If it is for 2013 this amount should equal the W code amount on 2013 W-2 plus any additional contributions taxpayer made outside of payroll. If they did make add'l contributions there should have been a deduction on line 25 of 2013 1040.

[gman]

Code w

Code w States employers contribution including amounts employee elected to contribute thru cafateria plan. So how do you determine
how much the employee could deduct on the tax return?

[TaxGuyBill]

Code w States employers contribution including amounts employee elected to contribute thru cafateria plan. So how do you determine
how much the employee could deduct on the tax return?

There's nothing to deduct. The W-2 wages are already reduced by the employee's HSA contribution, so it can't be deducted again.

[kathyc2]

You don't deduct anything for W amount, because like previous poster said it has already reduced box 1 of W-2. However, you do show it on line 9 of 8889.

If taxpayer makes additional contributions outside of payroll, then you deduct that amount.

The 5498 you are looking at is likely for 2013, like I said before, so that 1,250 has nothing to do with the W amount of 269.

[gman]

Distributions

Thank you, and distributions go on line 14a and are not taxed if used for medical expense, right?

[kathyc2]

Correct. Distributions used for medical expenses go on line 14a and line 15.

[Gretel]

I just learned that the complete information of contributions should be asked of taxpayer. In my scenario form for 2014 contributions was received which included contributions made before 4/15. for 2013. TP also received a revised one for 2013 but didn't tell me. Pure luck that I found out. Maybe each of the companies has different rules how to report, all the more scary.

[kathyc2]

I've never had one, but it does appear that the bank, etc holding the HSA account can send the 5498 in Jan and then revise it if contributions made 1/1-4/15.

I've never relied on the forms. Contributions to an HSA is on my client checklist just like contributions to IRA is.

HSA's are beyond awesome, but very few taxpayers understand them, and even fewer utilize them for the maximum tax benefit. I feel like I'm beating my head against the wall frequently encouraging clients to make transactions that are in their best financial interests.

[Gretel]

I know what you mean. While the HSA depends on a specific health insurance set up, MT offers something similar but independent of if and health insurance you have. At least it gives a break for the State tax return, and I bang my head too.

[gman]

made by taxpayer

If the HSA contributions are made by the taxpayer then it is deductible on line 25, right?
The only time it is deductible if it is made by the taxapayer. If it is on the w-2, it is already
take out of taxable wages and not deductible. Am I understanding this correctly?

thank you