What are the reporting requirements for health savings accounts?
As Health Savings Accounts (HSAs) continue to become more common as a way for people to save money on their medical expenses, it is important to remember one of the important components of HSAs: reporting requirements.
Traditional reimbursement accounts such as flexible spending account (FSAs) and health reimbursement arrangements (HRAs) do not have any additional reporting requirements for tax time. HSAs, on the other hand, require additional information to be provided and reported at tax time.
Form 8889 lists the contributions made to the account for the tax year. This includes contributions made by the account holder to their HSA as well as contributions made on their behalf by their employer. It is filed along with Form 1040 when the account holder files their taxes.
If the account holder has made excess contributions to their HSA and the excess contributions are not corrected before the tax filing deadline, the account holder must also report the excess contributions. The taxes and penalties are calculated and reported by the account holder on Form 5329.
Documentation for expenses paid from the HSA should be maintained by the account holder. Itemized receipts are not necessarily required to be filed with the account holder’s taxes, but should be available in the event that the account holder is required to show the funds were used for eligible expenses.
IRS Publication 969 provides additional information on reporting contributions to an HSA when filing taxes.
BusinessPlans, Inc. – myCafeteriaPlan does not intend to provide legal or tax advice and information contained in this article should not be interpreted as such. Regulations governing pretax plans are often open to interpretation and should be reviewed with your legal or tax advisor before making any decisions regarding your plan.