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How to Fill Out IRS Form 8889

How to Fill Out IRS Form 8889

Form 8889 is the tax form that covers all things related to your health savings account (HSA). You can access it by visiting the IRS website and you’ll need to complete it and file it with your Form 1040. Please note that your HSA administrator will not send this to you in the mail; they’ll only send your IRS Form 1099-SA and IRS Form 5498-SA.

Part 1

Line 1: This refers to what type of health insurance coverage you have. Check “Self-Only” if you are the only individual on your health plan. Check “Family” if you have any other individuals covered on your plan. If you had both self-only and family coverage during 2018, check whichever one was in effect for a longer period.

Line 2: Add your total HSA contribution amount for 2018 here. This includes any contributions made by you or another individual to your HSA but should not include any contributions made by your employer. Remember, this includes any contributions made during calendar year 2018, as well as contributions made between January 1, 2019 – April 15, 2019 that were specifically allocated toward 2018. Do not include any amounts rolled over from another HSA on this line.

Line 3: Enter $3,450 if you had self-only coverage and $6,900 if you had family coverage for 2018. If you or your spouse is age 55 or older, or you were not HSA-eligible for the entire calendar year, see the IRS instructions for completing Line 3 for more details.

Line 4: Only complete this line if you have an Archer MSA, which is different from an HSA. Otherwise, skip to Line 5.

Line 5: Complete this subtraction and enter total.

Line 6: Enter the amount from Line 5. If you and your spouse both have an HSA, see the IRS instructions for completing Line 6 for more details.

Line 7: If you were age 55 or older in 2018, were covered by a qualified consumer-driven health plan (CDHP), and were otherwise eligible in 2018, you’re eligible to contribute an additional $1,000/year to your HSA. If you took advantage of this in 2018, add $1,000 to Line 7. If you were not HSA-eligible for the full year, see the IRS instructions for completing Line 7 to help you calculate your prorated additional contribution.

Remember, being enrolled in Medicare makes you lose HSA eligibility.

Line 8: Add lines 6 and 7 and enter total.

Line 9: Enter your employer’s total contributions to your HSA for tax year 2018, as well as your employee contributions made through payroll deduction. This amount should be shown in Box 12 of your Form W-2 with code W.

Line 10: Enter any qualified HSA funding distributions you made in 2018 (this refers to any distributions from a traditional IRA or Roth IRA to your HSA in a direct trustee-to-trustee transfer). This should not include withdrawals you made for eligible medical expenses.

Line 11: Add lines 9 and 10 and enter total.

Line 12: Complete this subtraction and enter total.

Line 13: Enter the smaller of Line 2 or Line 12 here, as well as on your Form 1040. If you think you or your employer may have contributed to your HSA in excess, see the IRS instructions for completing Line 13.

Part 2

Line 14a: Enter the total amount you withdrew from your HSA in 2018. This includes debit card transactions and online withdrawals, as well as withdrawals made by a spouse or other dependent you’ve designated. If you made a withdrawal from your HSA in 2018, you should have received Form 1099-SA in the mail from your HSA custodian, which will provide your distribution total in Box 1.

Line 14b: Enter the total amount you rolled over to your HSA from another HSA in 2018. If you contributed in excess to your HSA and withdrew your excess contributions by the due date of your 2018 tax return, also include those here, along with the interest earnings of those excess contributions.

Line 14c: Subtract Line 14b from Line 14a and enter total.

Line 15: Enter the total amount of qualified medical expenses incurred in 2018 that were not reimbursed by your insurance company or any other coverage.

Line 16: Subtract Line 15 from Line 14c and enter total. Also include the total on Line 21 of your Form 1040.

Line 17a: If you withdrew funds from your HSA that are not for eligible medical expenses, those funds are subject to an additional 20% tax. For tax exceptions, see the IRS instructions under Line 17a. If any of your withdrawn funds meet the Exceptions to the Additional 20% Tax, check the box.

Line 17b: Calculate the additional 20% tax here, if applicable.

Part 3

Line 18: The last-month rule means that if you are HSA-eligible as of December 1, you’re considered an eligible individual for the entire year and can therefore contribute up to that year’s annual contribution limit. However, if you use the last-month rule to make a full contribution, you must remain eligible until December 31 of the following year (this timeframe is called a testing period). If you do not remain eligible, you must include the contribution amount that was only possible through the last-month rule as taxable income and pay an additional 10% tax penalty on that contribution amount. If this situation applies to you and you did not remain eligible and therefore will be taxed for your contribution, see the IRS instructions for completing Line 18.

Line 19: See Line 10.

Line 20: Add Line 18 and Line 19 and enter total. Also include the total on your Form 1040.

Line 21: Calculate the additional 10% tax here, if applicable.

If you have any additional questions about your Form 8889, feel free to contact us at (888) 354-0697 or support@HealthSavings.com.

Note: This content should be used for informational purposes only and must not be considered legal or tax advice. Investors should consult an appropriate legal, investment, or accounting professional as needed.

Author: Craig Keohan