Your HSA and Your Tax Return: 4 Tips for Filing
March 15, 2017
The season for filing taxes is upon us once again. As we get closer to the deadline for filing for 2019 (this year, it’s July 15, 2020 after being postponed due to the COVID-19 pandemic), we wanted to share a few tips and reminders about the Health Savings Account (HSA) information you’ll need for your tax return. These will help you get organized and prepared for easy and successful filing.
1. Make sure your W-2 form shows HSA payroll contributions
Provided by your employer, your W-2 shows the wages you earned and any taxes withheld. It also shows pre-tax contributions made to your account by you and your employer through payroll deductions. (Remember, only contributions made through payroll will show up on your W-2 – if you made any contributions outside of your payroll deductions, sometimes referred to as ad hoc contributions, they won’t be reflected and will need to be included when filing your taxes.)
2. Make sure you have access to your HSA tax forms (distribution and/or contribution forms)
A 1099-SA is the HSA tax form that reports distributions from your account. On the other hand, a 5498-SA reports contributions. It’s a little different from your W-2 because it’ll show any contributions – not just those made through payroll deductions. (The recipient instructions provided with each of these forms walk you through which boxes reflect which information, as well as basic instructions on how to use the forms.)
Discovery Benefits participants can find the tax forms related to their HSA under the “Message Center” tab of their online account here.
3. Prepare to report distributions and contributions using tax Form 8889
Form 8889 is used to report any distributions from and contributions to your Health Savings Account. (Think of this form as the place where the numbers from forms 1099-SA and 5498-SA or W-2 come together.) Any distribution amounts reflected on your Form 1099-SA need to be reported on this form, where you’ll also indicate which distributions were eligible for medical expenses. And any contributions made to your Health Savings Account should also be listed on this form – you’ll then carry that information over as deduction information on your Form 1040 (or the main tax form you fill out and file for your tax return).
4. Make any additional contributions by July 1, 2020
Looking to make additional contributions to your HSA? The good news is that if you haven’t filed for the tax year yet and haven’t maxed out your annual contribution, you can still make additional contributions to your HSA to count toward the prior year. You have until the tax deadline to do this, but it’s recommended to do it by early July (normally, that would be early April in a typical tax year) to be sure there’s enough time for any changes to process in your account and allow you to still complete and meet the tax return deadline. If you make a contribution between January 1, 2019 and July 15, 2020 that you want to be allocated to the 2019 tax year, just be sure to notify Discovery Benefits through your online account or with the HSA Contribution Form that the contribution was for 2019.
Check out our Resource Center for more resources, from savings calculators to videos and more.
Note: This post was originally published in March 2017. It was updated for accuracy in March 2020.