IRS Form 8889 - Taxable Distributions from HSA's and 20% Penalty
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5 ماه پیش
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Individual taxpayers with a high
Individual taxpayers with a high deductible health insurance plan (HDHP) can use a Health Savings Account (HSA) to lower their taxes and cover some of their medical costs.
Distributions from an HSA are reported to the IRS on Form 1099-SA. It is the taxpayer's responsibility to complete Form 8889 and report the total distributions and what amounts were used for qualified medical expenses. If funds are withdrawn from the HSA and not used for qualified medical expenses, the taxpayer must include that amount as taxable income, and they are subject to a 20% penalty tax.
In this example, we look at a single-filing taxpayer with a high deductible health insurance plan (HDHP) and self-only coverage. The taxpayer withdrew $1,000 and had only $700 of qualified medical expenses. The remaining $300 is included as taxable income and the taxpayer pays a $60 (20% times $300) penalty.
For a larger database of tutorials, please visit our website and search for your question:
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DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials.
#Form8889 #HealthSavingsAccount #HSA
Distributions from an HSA are reported to the IRS on Form 1099-SA. It is the taxpayer's responsibility to complete Form 8889 and report the total distributions and what amounts were used for qualified medical expenses. If funds are withdrawn from the HSA and not used for qualified medical expenses, the taxpayer must include that amount as taxable income, and they are subject to a 20% penalty tax.
In this example, we look at a single-filing taxpayer with a high deductible health insurance plan (HDHP) and self-only coverage. The taxpayer withdrew $1,000 and had only $700 of qualified medical expenses. The remaining $300 is included as taxable income and the taxpayer pays a $60 (20% times $300) penalty.
For a larger database of tutorials, please visit our website and search for your question:
https://knottlearning.com/
DISCLAIMER: The information provided in this video may contain information about tax, financial, and legal topics. Such materials are for informational purposes only and may not reflect the most current developments. These informational materials are not intended and should not be taken as tax, financial, or legal advice. You should contact an advisor to discuss your specific facts and circumstances. Self-help services may not be permitted in all states or jurisdictions. The use of these materials does not create an attorney-client or confidential relationship. This video does not include information about every topic or issue related to these informational materials.
#Form8889 #HealthSavingsAccount #HSA
5 ماه پیش
در تاریخ 1402/12/15 منتشر شده
است.
686
بـار بازدید شده