Received this from one of my vendors today (I've gussied it up a bit); if you have an HSA (Health Savings Account) plan, you may find them quite helpful:
First up, the ol' W-2:
W-2 reporting should include all HSA contributions made on a pre-tax basis by the employee and any HSA contributions made by the employer. If you started your HSA in 2008, please make sure to make note of this required reporting. Many employers did not include their contribution on the W-2 and now must reprint all W-2s in order reflect employee plus employer funding (Oops!).
Second, folks who contributed to their HSA last year will also receive a Form 5498-SA, which details HSA contributions for 2007. Please note, HSA owners have until April 15, 2008 to contribute monies into their HSA that may be applied toward their 2007 maximum contribution amount (as annually indexed). Of course(!), custodial banks will not mail these forms until May 2008.
Third, the ubiquitous 1099-SA (aka 1099). Folks who took distributions from their HSA in 2007 will also receive a 1099-SA detailing distributions from their HSA for 2007. This report is mailed by the end of January from the Bank Trustee. At least this form does not have to be attached to the filing.
Ever heard of Form 8889? Every health savings account owner must file IRS Form 8889 along with their personal tax return. The IRS is tracking who is purchasing and using Health Savings Accounts (HSAs). IRS Form 8889 makes sure that you receive all your tax credits and use the money for qualified medical expenses only. You can be penalized if the HSA money is used for non-qualified expenses. If you've already filed your taxes, we'd suggest that you complete IRS Form 8889 and send it with an explanation to the IRS along with a copy of your previously filed tax return.
Whew! But we're not done yet:
New Health Savings Account Regulations
■ The 2008 maximum annual contribution limit is $2,900 for single coverage and $5,800 for family coverage. Even though your 2008 deductible amounts may be less, you may choose to fund to these new annual maximums. In other words, you can "overfund" the HSA account in order to stockpile cash for potential future claims.
■ Employers are allowed to make a one-time transfer of the balance of an employee’s FSA or HRA account to an HSA. Of course, there are special rules for this; see your tax professional for details.
■ Individuals are allowed to make a one-time, tax-free, trustee to trustee, irrevocable distribution from their IRA into an HSA as long as the distribution amount does not exceed the annual contribution limit under most circumstances. Unlike the FSA/HSA transfer, the IRA transfer is not treated as a rollover contribution. Thus, any amounts transferred from the IRA to the HSA during the year reduce the amount that may otherwise be contributed to the HSA that year.
■ If you are over age 55, then you're eligible for an annual catch-up contribution of $900 for 2008. This is over and above the established maximums above. Again, see your tax pro for more information.
Did I mention that you should always consult with your own tax professional about these?