Instructions For Form 8889 - Health Savings Accounts Hsas - 2007

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Department of the Treasury
Internal Revenue Service
Instructions for Form 8889
Health Savings Accounts (HSAs)
Figure amounts you must include in
disabled, you will have to include in
Section references are to the Internal
Revenue Code unless otherwise noted.
income and additional tax you may owe
income the total contributions made
if you fail to be an eligible individual.
that would not have been made except
General Instructions
for the last-month rule. You include this
Additional information. See Pub.
amount in income in the year in which
969, Health Savings Accounts and
you fail to be an eligible individual. This
What’s New
Other Tax-Favored Health Plans, for
amount is also subject to a 10%
more details on HSAs.
Contribution limit. Contributions to
additional tax. (See Part III.)
your health savings account (HSA) are
Who Must File
Account Beneficiary
no longer limited to your annual health
You must file Form 8889 if any of the
plan deductible. For 2007, your annual
The account beneficiary is the
following applies.
contribution and deduction limit is
individual on whose behalf the HSA
You (or someone on your behalf,
$2,850 if you have a high deductible
was established.
including your employer) made
health plan with self-only coverage, or
contributions for 2007 to your HSA.
$5,650 if you have family coverage. If
HSA
You received HSA distributions in
you are age 55 or older at the end of
Generally, an HSA is a health savings
2007.
2007, your additional contribution
account set up exclusively for paying
You must include certain amounts in
amount is $800.
the qualified medical expenses of the
income because you failed to be an
account beneficiary or the account
Part-year coverage. If you are an
eligible individual during the testing
beneficiary’s spouse or dependents.
eligible individual on the first day of the
period.
last month of your tax year, you are
You acquired an interest in an HSA
Distributions From an HSA
considered an eligible individual for the
because of the death of the account
entire tax year for purposes of
Distributions from an HSA used
beneficiary. See Death of Account
determining the amount that can be
exclusively to pay qualified medical
Beneficiary on page 2.
contributed to your HSA. If you fail to
expenses of the account beneficiary,
remain an eligible individual during the
Definitions
spouse, or dependents are excludable
testing period, you will have to include
from gross income. (See the line 15
certain amounts in income and are
instructions for information on medical
subject to a 10% additional tax on that
Eligible Individual
expenses of dependents not claimed
amount.
on your return.) You can receive
To be eligible to have contributions
distributions from an HSA even if you
Qualified HSA distribution. You may
made to your HSA, you must be
are not currently eligible to have
covered under a high deductible health
be able to make a qualified HSA
contributions made to the HSA.
plan (HDHP) and have no other health
distribution from your health flexible
However, any part of a distribution not
coverage except permitted coverage. If
spending arrangement or health
used to pay qualified medical expenses
you are an eligible individual, anyone
reimbursement arrangement to your
is includible in gross income and is
HSA. If you fail to remain an eligible
can contribute to your HSA. However,
subject to an additional 10% tax unless
individual during the testing period, you
you cannot be enrolled in Medicare or
an exception applies.
will have to include the distribution in
be claimed as a dependent on another
income and are subject to a 10%
person’s tax return. You must be, or be
Qualified Medical Expenses
considered, an eligible individual on the
additional tax on that distribution.
Generally, qualified medical expenses
first day of a month to take an HSA
Qualified HSA funding distribution.
for HSA purposes are unreimbursed
deduction for that month (see
You can make a qualified HSA funding
medical expenses that could otherwise
Last-month rule next).
distribution from your individual
be deducted on Schedule A (Form
Last-month rule. If you are an eligible
retirement arrangement to your HSA. If
1040). See the Instructions for
individual on the first day of the last
you fail to remain an eligible individual
Schedule A and Pub. 502, Medical and
month of your tax year (December 1 for
during the testing period, you will have
Dental Expenses (Including the Health
most taxpayers), you are considered to
to include the distribution in income and
Coverage Tax Credit). However, you
be an eligible individual for the entire
are subject to a 10% additional tax on
cannot treat insurance premiums as
year.
that distribution.
qualified medical expenses unless the
Testing period. You must remain
premiums are for:
Purpose of Form
an eligible individual during the testing
period. The testing period begins with
Long-term care (LTC) insurance,
Use Form 8889 to:
the last month of your tax year and
Health care continuation coverage
Report health savings account (HSA)
ends on the last day of the 12th month
(such as coverage under COBRA),
contributions (including those made on
following that month (for example,
Health care coverage while receiving
your behalf and employer
December 1, 2007 – December 31,
unemployment compensation under
contributions),
2008). If you fail to remain an eligible
federal or state law, or
Figure your HSA deduction,
individual during this period, other than
Medicare and other health care
Report distributions from HSAs, and
because of death or becoming
coverage if you were 65 or older (other
Cat. No. 37971Y

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