File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Efile State Taxes For Free

1040 Ez 2012Cheap State Tax Filing2011 Form 1040Form 1040nr 20112011 Tax FormsTurbo Tax 1040ezTax Correction FormI Need To File My 2006 Taxes For FreeE File 2012 Federal TaxesCan I Amend My Tax ReturnCan I File 2011 Taxes In 2013Freetaxusa 2009Help With 1040xFile A Tax Extension OnlineHow Do I File My 2011 Taxes LateFile Past Taxes OnlineFederal And State Tax FormsFree State Return OnlyWhere To File State Taxes For FreeFile Amended Tax Return 2010 OnlineHow To Amend A State Tax ReturnNonresidents State Tax FormsTurbo Tax Ez FormOnline Tax ExtensionFile Taxes Last YearFree State E File TaxesAmend 2012 TaxesHow To File TaxesFile Tax Extension1040ez 2010printable Tax FormsI Didn T File My 2011 TaxesState Efile1040ez 2012Form 1040 XIrs Forms 1040ezFree State Tax E FilingInstructions For Filing An Amended Tax ReturnHow To File Taxes For Self Employment IncomeHow Do I File 2012 Taxes2010 1040ez Tax Form

Efile State Taxes For Free

Efile state taxes for free 6. Efile state taxes for free   Tip Income Table of Contents Introduction Useful Items - You may want to see: Keeping a Daily Tip RecordElectronic tip record. Efile state taxes for free Reporting Tips to Your EmployerElectronic tip statement. Efile state taxes for free Final report. Efile state taxes for free Reporting Tips on Your Tax Return Allocated Tips Introduction This chapter is for employees who receive tips. Efile state taxes for free All tips you receive are income and are subject to federal income tax. Efile state taxes for free You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. Efile state taxes for free The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. Efile state taxes for free Reporting your tip income correctly is not difficult. Efile state taxes for free You must do three things. Efile state taxes for free Keep a daily tip record. Efile state taxes for free Report tips to your employer. Efile state taxes for free Report all your tips on your income tax return. Efile state taxes for free  This chapter will explain these three things and show you what to do on your tax return if you have not done the first two. Efile state taxes for free This chapter will also show you how to treat allocated tips. Efile state taxes for free For information on special tip programs and agreements, see Publication 531. Efile state taxes for free Useful Items - You may want to see: Publication 531 Reporting Tip Income 1244 Employee's Daily Record of Tips and Report to Employer Form (and Instructions) 4137 Social Security and Medicare Tax on Unreported Tip Income 4070 Employee's Report of Tips to Employer Keeping a Daily Tip Record Why keep a daily tip record. Efile state taxes for free   You must keep a daily tip record so you can: Report your tips accurately to your employer, Report your tips accurately on your tax return, and Prove your tip income if your return is ever questioned. Efile state taxes for free How to keep a daily tip record. Efile state taxes for free   There are two ways to keep a daily tip record. Efile state taxes for free You can either: Write information about your tips in a tip diary, or Keep copies of documents that show your tips, such as restaurant bills and credit or debit card charge slips. Efile state taxes for free You should keep your daily tip record with your tax or other personal records. Efile state taxes for free You must keep your records for as long as they are important for administration of the federal tax law. Efile state taxes for free For information on how long to keep records, see How long to keep records in chapter 1. Efile state taxes for free    If you keep a tip diary, you can use Form 4070A, Employee's Daily Record of Tips. Efile state taxes for free To get Form 4070A, ask the Internal Revenue Service (IRS) or your employer for Publication 1244. Efile state taxes for free Also, Publication 1244 is available online at www. Efile state taxes for free irs. Efile state taxes for free gov/pub/irs-pdf/p1244. Efile state taxes for free pdf. Efile state taxes for free Publication 1244 includes a 1-year supply of Form 4070A. Efile state taxes for free Each day, write in the information asked for on the form. Efile state taxes for free   In addition to the information asked for on Form 4070A, you also need to keep a record of the date and value of any noncash tips you get, such as tickets, passes, or other items of value. Efile state taxes for free Although you do not report these tips to your employer, you must report them on your tax return. Efile state taxes for free   If you do not use Form 4070A, start your records by writing your name, your employer's name, and the name of the business (if it is different from your employer's name). Efile state taxes for free Then, each workday, write the date and the following information. Efile state taxes for free Cash tips you get directly from customers or from other employees. Efile state taxes for free Tips from credit and debit card charge customers that your employer pays you. Efile state taxes for free The value of any noncash tips you get, such as tickets, passes, or other items of value. Efile state taxes for free The amount of tips you paid out to other employees through tip pools or tip splitting, or other arrangements, and the names of the employees to whom you paid the tips. Efile state taxes for free Electronic tip record. Efile state taxes for free   You can use an electronic system provided by your employer to record your daily tips. Efile state taxes for free If you do, you must receive and keep a paper copy of this record. Efile state taxes for free Service charges. Efile state taxes for free    Do not write in your tip diary the amount of any service charge that your employer adds to a customer's bill and then pays to you and treats as wages. Efile state taxes for free This is part of your wages, not a tip. Efile state taxes for free See examples below. Efile state taxes for free Example 1. Efile state taxes for free Good Food Restaurant adds an 18% charge to the bill for parties of 6 or more customers. Efile state taxes for free Jane’s bill for food and beverages for her party of 8 includes an amount on the tip line equal to 18% of the charges for food and beverages, and the total includes this amount. Efile state taxes for free Because Jane did not have an unrestricted right to determine the amount on the “tip line,” the 18% charge is considered a service charge. Efile state taxes for free Do not include the 18% charge in your tip diary. Efile state taxes for free Service charges that are paid to you are considered wages, not tips. Efile state taxes for free Example 2. Efile state taxes for free Good Food Restaurant also includes sample calculations of tip amounts at the bottom of its bills for food and beverages provided to customers. Efile state taxes for free David’s bill includes a blank “tip line,” with sample tip calculations of 15%, 18%, and 20% of his charges for food and beverages at the bottom of the bill beneath the signature line. Efile state taxes for free Because David is free to enter any amount on the “tip line” or leave it blank, any amount he includes is considered a tip. Efile state taxes for free Be sure to include this amount in your tip diary. Efile state taxes for free Reporting Tips to Your Employer Why report tips to your employer. Efile state taxes for free   You must report tips to your employer so that: Your employer can withhold federal income tax and social security, Medicare, Additional Medicare, or railroad retirement taxes, Your employer can report the correct amount of your earnings to the Social Security Administration or Railroad Retirement Board (which affects your benefits when you retire or if you become disabled, or your family's benefits if you die), and You can avoid the penalty for not reporting tips to your employer (explained later). Efile state taxes for free What tips to report. Efile state taxes for free   Report to your employer only cash, check, and debit and credit card tips you receive. Efile state taxes for free   If your total tips for any 1 month from any one job are less than $20, do not report the tips for that month to that employer. Efile state taxes for free   If you participate in a tip-splitting or tip-pooling arrangement, report only the tips you receive and retain. Efile state taxes for free Do not report to your employer any portion of the tips you receive that you pass on to other employees. Efile state taxes for free However, you must report tips you receive from other employees. Efile state taxes for free    Do not report the value of any noncash tips, such as tickets or passes, to your employer. Efile state taxes for free You do not pay social security, Medicare, Additional Medicare or railroad retirement taxes on these tips. Efile state taxes for free How to report. Efile state taxes for free    If your employer does not give you any other way to report tips, you can use Form 4070. Efile state taxes for free Fill in the information asked for on the form, sign and date the form, and give it to your employer. Efile state taxes for free To get a 1-year supply of the form, ask the IRS or your employer for Publication 1244. Efile state taxes for free   If you do not use Form 4070, give your employer a statement with the following information. Efile state taxes for free Your name, address, and social security number. Efile state taxes for free Your employer's name, address, and business name (if it is different from your employer's name). Efile state taxes for free The month (or the dates of any shorter period) in which you received tips. Efile state taxes for free The total tips required to be reported for that period. Efile state taxes for free You must sign and date the statement. Efile state taxes for free Be sure to keep a copy with your tax or other personal records. Efile state taxes for free   Your employer may require you to report your tips more than once a month. Efile state taxes for free However, the statement cannot cover a period of more than 1 calendar month. Efile state taxes for free Electronic tip statement. Efile state taxes for free   Your employer can have you furnish your tip statements electronically. Efile state taxes for free When to report. Efile state taxes for free   Give your report for each month to your employer by the 10th of the next month. Efile state taxes for free If the 10th falls on a Saturday, Sunday, or legal holiday, give your employer the report by the next day that is not a Saturday, Sunday, or legal holiday. Efile state taxes for free Example. Efile state taxes for free You must report your tips received in September 2014 by October 10, 2014. Efile state taxes for free Final report. Efile state taxes for free   If your employment ends during the month, you can report your tips when your employment ends. Efile state taxes for free Penalty for not reporting tips. Efile state taxes for free   If you do not report tips to your employer as required, you may be subject to a penalty equal to 50% of the social security, Medicare, and Additional Medicare taxes or railroad retirement tax you owe on the unreported tips. Efile state taxes for free (For information about these taxes, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, later. Efile state taxes for free ) The penalty amount is in addition to the taxes you owe. Efile state taxes for free   You can avoid this penalty if you can show reasonable cause for not reporting the tips to your employer. Efile state taxes for free To do so, attach a statement to your return explaining why you did not report them. Efile state taxes for free Giving your employer money for taxes. Efile state taxes for free   Your regular pay may not be enough for your employer to withhold all the taxes you owe on your regular pay plus your reported tips. Efile state taxes for free If this happens, you can give your employer money until the close of the calendar year to pay the rest of the taxes. Efile state taxes for free   If you do not give your employer enough money, your employer will apply your regular pay and any money you give in the following order. Efile state taxes for free All taxes on your regular pay. Efile state taxes for free Social security, Medicare, and Additional Medicare taxes or railroad retirement taxes on your reported tips. Efile state taxes for free Federal, state, and local income taxes on your reported tips. Efile state taxes for free    Any taxes that remain unpaid can be collected by your employer from your next paycheck. Efile state taxes for free If withholding taxes remain uncollected at the end of the year, you may be subject to a penalty for underpayment of estimated taxes. Efile state taxes for free See Publication 505, Tax Withholding and Estimated Tax, for more information. Efile state taxes for free    Uncollected taxes. Efile state taxes for free You must report on your tax return any social security and Medicare taxes or railroad retirement tax that remained uncollected at the end of 2013. Efile state taxes for free These uncollected taxes will be shown on your 2013 Form W-2. Efile state taxes for free See Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer under Reporting Tips on Your Tax Return, later. Efile state taxes for free Reporting Tips on Your Tax Return How to report tips. Efile state taxes for free    Report your tips with your wages on Form 1040, line 7; Form 1040A, line 7; or Form 1040EZ, line 1. Efile state taxes for free What tips to report. Efile state taxes for free   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Efile state taxes for free Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Efile state taxes for free Add to the amount in box 1 only the tips you did not report to your employer. Efile state taxes for free    If you received $20 or more in cash and charge tips in a month and did not report all of those tips to your employer, see Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer, later. Efile state taxes for free    If you did not keep a daily tip record as required and an amount is shown in box 8 of your Form W-2, see Allocated Tips, later. Efile state taxes for free   If you kept a daily tip record and reported tips to your employer as required under the rules explained earlier, add the following tips to the amount in box 1 of your Form W-2. Efile state taxes for free Cash and charge tips you received that totaled less than $20 for any month. Efile state taxes for free The value of noncash tips, such as tickets, passes, or other items of value. Efile state taxes for free Example. Efile state taxes for free Ben Smith began working at the Blue Ocean Restaurant (his only employer in 2013) on June 30 and received $10,000 in wages during the year. Efile state taxes for free Ben kept a daily tip record showing that his tips for June were $18 and his tips for the rest of the year totaled $7,000. Efile state taxes for free He was not required to report his June tips to his employer, but he reported all of the rest of his tips to his employer as required. Efile state taxes for free Ben's Form W-2 from Blue Ocean Restaurant shows $17,000 ($10,000 wages plus $7,000 reported tips) in box 1. Efile state taxes for free He adds the $18 unreported tips to that amount and reports $17,018 as wages on his tax return. Efile state taxes for free Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer. Efile state taxes for free    If you received $20 or more in cash and charge tips in a month from any one job and did not report all of those tips to your employer, you must report the social security, Medicare, and Additional Medicare taxes on the unreported tips as additional tax on your return. Efile state taxes for free To report these taxes, you must file a return even if you would not otherwise have to file. Efile state taxes for free You must use Form 1040. Efile state taxes for free (You cannot file Form 1040EZ or Form 1040A. Efile state taxes for free )    Use Form 4137 to figure social security and Medicare taxes. Efile state taxes for free Enter the tax on your return as instructed, and attach the completed Form 4137 to your return. Efile state taxes for free Use Form 8959 to figure Additional Medicare Tax. Efile state taxes for free    If you are subject to the Railroad Retirement Tax Act, you cannot use Form 4137 to pay railroad retirement tax on unreported tips. Efile state taxes for free To get railroad retirement credit, you must report tips to your employer. Efile state taxes for free Reporting uncollected social security, Medicare, or railroad retirement taxes on tips reported to your employer. Efile state taxes for free   You may have uncollected taxes if your regular pay was not enough for your employer to withhold all the taxes you owe and you did not give your employer enough money to pay the rest of the taxes. Efile state taxes for free For more information, see Giving your employer money for taxes , under Reporting Tips to Your Employer, earlier. Efile state taxes for free   If your employer could not collect all the social security and Medicare taxes or railroad retirement tax you owe on tips reported for 2013, the uncollected taxes will be shown in box 12 of your Form W-2 (codes A and B). Efile state taxes for free You must report these amounts as additional tax on your return. Efile state taxes for free Unlike the uncollected portion of the regular (1. Efile state taxes for free 45%) Medicare tax, the uncollected Additional Medicare Tax is not reported in box 12 of Form W-2 with code B. Efile state taxes for free    To report these uncollected taxes, you must file a return even if you would not otherwise have to file. Efile state taxes for free You must report these taxes on Form 1040, line 60. Efile state taxes for free See the instructions for Form 1040, line 60. Efile state taxes for free (You cannot file Form 1040EZ or Form 1040A. Efile state taxes for free ) Allocated Tips If your employer allocated tips to you, they are shown separately in box 8 of your Form W-2. Efile state taxes for free They are not included in box 1 with your wages and reported tips. Efile state taxes for free If box 8 is blank, this discussion does not apply to you. Efile state taxes for free What are allocated tips. Efile state taxes for free   These are tips that your employer assigned to you in addition to the tips you reported to your employer for the year. Efile state taxes for free Your employer will have done this only if: You worked in an establishment (restaurant, cocktail lounge, or similar business) that must allocate tips to employees, and The tips you reported to your employer were less than your share of 8% of food and drink sales. Efile state taxes for free No income, social security, Medicare, Additional Medicare or railroad retirement taxes are withheld on allocated tips. Efile state taxes for free How were your allocated tips figured. Efile state taxes for free   The tips allocated to you are your share of an amount figured by subtracting the reported tips of all employees from 8% (or an approved lower rate) of food and drink sales (other than carryout sales and sales with a service charge of 10% or more). Efile state taxes for free Your share of that amount was figured using either a method provided by an employer-employee agreement or a method provided by IRS regulations based on employees' sales or hours worked. Efile state taxes for free For information about the exact allocation method used, ask your employer. Efile state taxes for free Must you report your allocated tips on your tax return. Efile state taxes for free   You must report all tips you received in 2013 on your tax return, including both cash tips and noncash tips. Efile state taxes for free Any tips you reported to your employer for 2013 are included in the wages shown in box 1 of your Form W-2. Efile state taxes for free Add to the amount in box 1 only the tips you did not report to your employer. Efile state taxes for free This should include any allocated tips shown in box 8 on your Form(s) W-2, unless you have adequate records to show that you received less tips in the year than the allocated figures. Efile state taxes for free   See What tips to report under Reporting Tips on Your Tax Return, and Keeping a Daily Tip Record , earlier. Efile state taxes for free How to report allocated tips. Efile state taxes for free   Report the amount in box 1 and the allocated tips in box 8 of your Form(s) W-2 as wages on Form 1040, line 7; Form 1040NR, line 8; or Form 1040NR-EZ, line 3. Efile state taxes for free (You cannot file Form 1040A or Form 1040EZ when you have allocated tips. Efile state taxes for free )    Because social security, Medicare, and Additional Medicare taxes were not withheld from the allocated tips, you must report those taxes as additional tax on your return. Efile state taxes for free Complete Form 4137, and include the allocated tips on line 1 of the form. Efile state taxes for free See Reporting social security, Medicare, Additional Medicare, or railroad retirement taxes on tips not reported to your employer under Reporting Tips on Your Tax Return, earlier. Efile state taxes for free Prev  Up  Next   Home   More Online Publications
Print - Click this link to Print this page

Tax Information for Members of the Military

Special EITC Rules
Special rules apply for calculating Earned Income Tax Credit or EITC for members of the military, ministers or members of the clergy.

Tax Information for Members of the U.S. Armed Forces
Members of the U.S. Armed Forces, especially those serving in combat zones, face some special tax situations and are entitled to some special tax benefits.

Special Tax Considerations for Veterans
Special tax considerations for disabled veterans occasionally result in a need for amended returns

2013 Publ3 (PDF)
Armed Forces' Tax Guide

Employers with Employees in a Combat Zone
FAQs for employers whose workers deploy to a combat zone

Extension of Deadlines — Combat Zone Service
Extension of deadlines for combat zone service

Retirement Plans FAQs regarding USERRA and SSCRA
Insights into the re-employment of veterans and the restoration of retirement plan benefits, as affected by the Uniformed Services and Reemployment Rights Act (USERRA) and the Veterans and Sailors Civil Relief Act (SSCRA).

Miscellaneous Provisions — Combat Zone Service
Miscellaneous provisions related to combat zone service

1040 Central
1040 Central has been updated for the last few weeks of Filing Season 2014.

Page Last Reviewed or Updated: 27-Mar-2014

The Efile State Taxes For Free

Efile state taxes for free Publication 969 - Main Content Table of Contents Health Savings Accounts (HSAs)Qualifying for an HSA Contributions to an HSA Distributions From an HSA Balance in an HSA Death of HSA Holder Filing Form 8889 Employer Participation Medical Savings Accounts (MSAs)Archer MSAs Contributions to an MSA Distributions From an MSA Balance in an Archer MSA Death of the Archer MSA Holder Filing Form 8853 Employer Participation Medicare Advantage MSAs Flexible Spending Arrangements (FSAs)Qualifying for an FSA Contributions to an FSA Distributions From an FSA Balance in an FSA Employer Participation Health Reimbursement Arrangements (HRAs)Qualifying for an HRA Contributions to an HRA Distributions From an HRA Balance in an HRA Employer Participation How To Get Tax HelpLow Income Taxpayer Clinics Health Savings Accounts (HSAs) A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. Efile state taxes for free You must be an eligible individual to qualify for an HSA. Efile state taxes for free No permission or authorization from the IRS is necessary to establish an HSA. Efile state taxes for free You set up an HSA with a trustee. Efile state taxes for free A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. Efile state taxes for free The HSA can be established through a trustee that is different from your health plan provider. Efile state taxes for free Your employer may already have some information on HSA trustees in your area. Efile state taxes for free If you have an Archer MSA, you can generally roll it over into an HSA tax free. Efile state taxes for free See Rollovers, later. Efile state taxes for free What are the benefits of an HSA?   You may enjoy several benefits from having an HSA. Efile state taxes for free You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040. Efile state taxes for free Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. Efile state taxes for free The contributions remain in your account until you use them. Efile state taxes for free The interest or other earnings on the assets in the account are tax free. Efile state taxes for free Distributions may be tax free if you pay qualified medical expenses. Efile state taxes for free See Qualified medical expenses , later. Efile state taxes for free An HSA is “portable. Efile state taxes for free ” It stays with you if you change employers or leave the work force. Efile state taxes for free Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. Efile state taxes for free You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month. Efile state taxes for free You have no other health coverage except what is permitted under Other health coverage , later. Efile state taxes for free You are not enrolled in Medicare. Efile state taxes for free You cannot be claimed as a dependent on someone else's 2013 tax return. Efile state taxes for free Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). Efile state taxes for free If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse's coverage does not cover you. Efile state taxes for free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. Efile state taxes for free This is true even if the other person does not actually claim your exemption. Efile state taxes for free Each spouse who is an eligible individual who wants an HSA must open a separate HSA. Efile state taxes for free You cannot have a joint HSA. Efile state taxes for free High deductible health plan (HDHP). Efile state taxes for free   An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. Efile state taxes for free Out-of-pocket expenses include copayments and other amounts, but do not include premiums. Efile state taxes for free   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. Efile state taxes for free Preventive care includes, but is not limited to, the following. Efile state taxes for free Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. Efile state taxes for free Routine prenatal and well-child care. Efile state taxes for free Child and adult immunizations. Efile state taxes for free Tobacco cessation programs. Efile state taxes for free Obesity weight-loss programs. Efile state taxes for free Screening services. Efile state taxes for free This includes screening services for the following: Cancer. Efile state taxes for free Heart and vascular diseases. Efile state taxes for free Infectious diseases. Efile state taxes for free Mental health conditions. Efile state taxes for free Substance abuse. Efile state taxes for free Metabolic, nutritional, and endocrine conditions. Efile state taxes for free Musculoskeletal disorders. Efile state taxes for free Obstetric and gynecological conditions. Efile state taxes for free Pediatric conditions. Efile state taxes for free Vision and hearing disorders. Efile state taxes for free For more information on screening services, see Notice 2004-23, 2004-15 I. Efile state taxes for free R. Efile state taxes for free B. Efile state taxes for free 725 available at www. Efile state taxes for free irs. Efile state taxes for free gov/irb/2004-15_IRB/ar10. Efile state taxes for free html. Efile state taxes for free     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. Efile state taxes for free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,250 $12,500 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Efile state taxes for free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Efile state taxes for free    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. Efile state taxes for free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,350 $12,700 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Efile state taxes for free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. Efile state taxes for free   Self-only HDHP coverage is an HDHP covering only an eligible individual. Efile state taxes for free Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual). Efile state taxes for free Example. Efile state taxes for free An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. Efile state taxes for free This is family HDHP coverage. Efile state taxes for free Family plans that do not meet the high deductible rules. Efile state taxes for free   There are some family plans that have deductibles for both the family as a whole and for individual family members. Efile state taxes for free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Efile state taxes for free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Efile state taxes for free Example. Efile state taxes for free You have family health insurance coverage in 2013. Efile state taxes for free The annual deductible for the family plan is $3,500. Efile state taxes for free This plan also has an individual deductible of $1,500 for each family member. Efile state taxes for free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($2,500) for family coverage. Efile state taxes for free Other health coverage. Efile state taxes for free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Efile state taxes for free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Efile state taxes for free    You can have additional insurance that provides benefits only for the following items. Efile state taxes for free Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. Efile state taxes for free A specific disease or illness. Efile state taxes for free A fixed amount per day (or other period) of hospitalization. Efile state taxes for free   You can also have coverage (whether provided through insurance or otherwise) for the following items. Efile state taxes for free Accidents. Efile state taxes for free Disability. Efile state taxes for free Dental care. Efile state taxes for free Vision care. Efile state taxes for free Long-term care. Efile state taxes for free    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. Efile state taxes for free For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA. Efile state taxes for free Prescription drug plans. Efile state taxes for free   You can have a prescription drug plan, either as part of your HDHP or a separate plan (or rider), and qualify as an eligible individual if the plan does not provide benefits until the minimum annual deductible of the HDHP has been met. Efile state taxes for free If you can receive benefits before that deductible is met, you are not an eligible individual. Efile state taxes for free Other employee health plans. Efile state taxes for free   An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA. Efile state taxes for free Health FSAs and HRAs are discussed later. Efile state taxes for free   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. Efile state taxes for free Limited-purpose health FSA or HRA. Efile state taxes for free These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. Efile state taxes for free Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. Efile state taxes for free Suspended HRA. Efile state taxes for free Before the beginning of an HRA coverage period, you can elect to suspend the HRA. Efile state taxes for free The HRA does not pay or reimburse, at any time, the medical expenses incurred during the suspension period except preventive care and items listed under Other health coverage. Efile state taxes for free When the suspension period ends, you are no longer eligible to make contributions to an HSA. Efile state taxes for free Post-deductible health FSA or HRA. Efile state taxes for free These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. Efile state taxes for free The deductible for these arrangements does not have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met. Efile state taxes for free Retirement HRA. Efile state taxes for free This arrangement pays or reimburses only those medical expenses incurred after retirement. Efile state taxes for free After retirement you are no longer eligible to make contributions to an HSA. Efile state taxes for free Health FSA – grace period. Efile state taxes for free   Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero. Efile state taxes for free See Flexible Spending Arrangements (FSAs) , later. Efile state taxes for free Contributions to an HSA Any eligible individual can contribute to an HSA. Efile state taxes for free For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. Efile state taxes for free For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Efile state taxes for free Family members or any other person may also make contributions on behalf of an eligible individual. Efile state taxes for free Contributions to an HSA must be made in cash. Efile state taxes for free Contributions of stock or property are not allowed. Efile state taxes for free Limit on Contributions The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. Efile state taxes for free For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. Efile state taxes for free If you have family HDHP coverage, you can contribute up to $6,450. Efile state taxes for free For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. Efile state taxes for free If you have family HDHP coverage you can contribute up to $6,550. Efile state taxes for free If you were, or were considered (under the last-month rule, discussed later), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your type of coverage. Efile state taxes for free However, if you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year. Efile state taxes for free If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2013 is $6,450 even if you changed coverage during the year. Efile state taxes for free Last-month rule. Efile state taxes for free   Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. Efile state taxes for free You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. Efile state taxes for free Testing period. Efile state taxes for free   If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. Efile state taxes for free For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. Efile state taxes for free For example, December 1, 2013, through December 31, 2014. Efile state taxes for free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule. Efile state taxes for free You include this amount in your income in the year in which you fail to be an eligible individual. Efile state taxes for free This amount is also subject to a 10% additional tax. Efile state taxes for free The income and additional tax are shown on Form 8889, Part III. Efile state taxes for free Example 1. Efile state taxes for free Chris, age 53, becomes an eligible individual on December 1, 2013. Efile state taxes for free He has family HDHP coverage on that date. Efile state taxes for free Under the last-month rule, he contributes $6,450 to his HSA. Efile state taxes for free Chris fails to be an eligible individual in June 2014. Efile state taxes for free Because Chris did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), he must include in his 2014 income the contributions made in 2013 that would not have been made except for the last-month rule. Efile state taxes for free Chris uses the worksheet in the Form 8889 instructions to determine this amount. Efile state taxes for free January -0- February -0- March -0- April -0- May -0- June -0- July -0- August -0- September -0- October -0- November -0- December $6,450. Efile state taxes for free 00 Total for all months $6,450. Efile state taxes for free 00 Limitation. Efile state taxes for free Divide the total by 12 $537. Efile state taxes for free 50 Chris would include $5,912. Efile state taxes for free 50 ($6,450. Efile state taxes for free 00 – $537. Efile state taxes for free 50) in his gross income on his 2014 tax return. Efile state taxes for free Also, a 10% additional tax applies to this amount. Efile state taxes for free Example 2. Efile state taxes for free Erika, age 39, has self-only HDHP coverage on January 1, 2013. Efile state taxes for free Erika changes to family HDHP coverage on November 1, 2013. Efile state taxes for free Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. Efile state taxes for free Erika fails to be an eligible individual in March 2014. Efile state taxes for free Because she did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), she must include in income the contribution made that would not have been made except for the last-month rule. Efile state taxes for free Erika uses the worksheet in the Form 8889 instructions to determine this amount. Efile state taxes for free January $3,250. Efile state taxes for free 00 February $3,250. Efile state taxes for free 00 March $3,250. Efile state taxes for free 00 April $3,250. Efile state taxes for free 00 May $3,250. Efile state taxes for free 00 June $3,250. Efile state taxes for free 00 July $3,250. Efile state taxes for free 00 August $3,250. Efile state taxes for free 00 September $3,250. Efile state taxes for free 00 October $3,250. Efile state taxes for free 00 November $6,450. Efile state taxes for free 00 December $6,450. Efile state taxes for free 00 Total for all months $45,400. Efile state taxes for free 00 Limitation. Efile state taxes for free Divide the total by 12 $3,783. Efile state taxes for free 34 Erika would include $2,666. Efile state taxes for free 67 ($6,450 – $3,783. Efile state taxes for free 34) in her gross income on her 2014 tax return. Efile state taxes for free Also, a 10% additional tax applies to this amount. Efile state taxes for free Additional contribution. Efile state taxes for free   If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. Efile state taxes for free For example, if you have self-only coverage, you can contribute up to $4,250 (the contribution limit for self-only coverage ($3,250) plus the additional contribution of $1,000). Efile state taxes for free However, see Enrolled in Medicare , later. Efile state taxes for free If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. Efile state taxes for free Reduction of contribution limit. Efile state taxes for free   You must reduce the amount that can be contributed (including any additional contribution) to your HSA by the amount of any contribution made to your Archer MSA (including employer contributions) for the year. Efile state taxes for free A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. Efile state taxes for free Rules for married people. Efile state taxes for free   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. Efile state taxes for free If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. Efile state taxes for free You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. Efile state taxes for free After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. Efile state taxes for free The rules for married people apply only if both spouses are eligible individuals. Efile state taxes for free If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. Efile state taxes for free If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. Efile state taxes for free Each spouse must make the additional contribution to his or her own HSA. Efile state taxes for free Example. Efile state taxes for free For 2013, Mr. Efile state taxes for free Auburn and his wife are both eligible individuals. Efile state taxes for free They each have family coverage under separate HDHPs. Efile state taxes for free Mr. Efile state taxes for free Auburn is 58 years old and Mrs. Efile state taxes for free Auburn is 53. Efile state taxes for free Mr. Efile state taxes for free and Mrs. Efile state taxes for free Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. Efile state taxes for free If they split it equally, Mr. Efile state taxes for free Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. Efile state taxes for free Auburn can contribute $3,225 to an HSA. Efile state taxes for free Employer contributions. Efile state taxes for free   You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. Efile state taxes for free This includes amounts contributed to your account by your employer through a cafeteria plan. Efile state taxes for free Enrolled in Medicare. Efile state taxes for free   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. Efile state taxes for free Example. Efile state taxes for free You turned age 65 in July 2013 and enrolled in Medicare. Efile state taxes for free You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. Efile state taxes for free Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). Efile state taxes for free Qualified HSA funding distribution. Efile state taxes for free   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. Efile state taxes for free This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. Efile state taxes for free For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. Efile state taxes for free   The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. Efile state taxes for free The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. Efile state taxes for free The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. Efile state taxes for free The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. Efile state taxes for free   You can make only one qualified HSA funding distribution during your lifetime. Efile state taxes for free However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. Efile state taxes for free The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled. Efile state taxes for free Example. Efile state taxes for free In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. Efile state taxes for free You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). Efile state taxes for free Funding distribution – testing period. Efile state taxes for free   You must remain an eligible individual during the testing period. Efile state taxes for free For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. Efile state taxes for free For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2013, your testing period begins in August 2013, and ends on August 31, 2014. Efile state taxes for free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. Efile state taxes for free You include this amount in income in the year in which you fail to be an eligible individual. Efile state taxes for free This amount is also subject to a 10% additional tax. Efile state taxes for free The income and the additional tax are shown on Form 8889, Part III. Efile state taxes for free   Each qualified HSA funding distribution allowed has its own testing period. Efile state taxes for free For example, you are an eligible individual, age 45, with self-only HDHP coverage. Efile state taxes for free On June 18, 2013, you make a qualified HSA funding distribution of $3,250. Efile state taxes for free On July 27, 2013, you enroll in family HDHP coverage and on August 17, 2013, you make a qualified HSA funding distribution of $3,200. Efile state taxes for free Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. Efile state taxes for free Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. Efile state taxes for free   The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. Efile state taxes for free If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period. Efile state taxes for free Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. Efile state taxes for free Archer MSAs and other HSAs. Efile state taxes for free   You can roll over amounts from Archer MSAs and other HSAs into an HSA. Efile state taxes for free You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. Efile state taxes for free Rollover contributions do not need to be in cash. Efile state taxes for free Rollovers are not subject to the annual contribution limits. Efile state taxes for free   You must roll over the amount within 60 days after the date of receipt. Efile state taxes for free You can make only one rollover contribution to an HSA during a 1-year period. Efile state taxes for free Note. Efile state taxes for free If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer is not considered a rollover. Efile state taxes for free There is no limit on the number of these transfers. Efile state taxes for free Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. Efile state taxes for free When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. Efile state taxes for free If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. Efile state taxes for free Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. Efile state taxes for free Your employer must notify you and the trustee of your HSA that the contribution is for 2013. Efile state taxes for free The contribution will be reported on your 2014 Form W-2. Efile state taxes for free Reporting Contributions on Your Return Contributions made by your employer are not included in your income. Efile state taxes for free Contributions to an employee's account by an employer using the amount of an employee's salary reduction through a cafeteria plan are treated as employer contributions. Efile state taxes for free Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income. Efile state taxes for free Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. Efile state taxes for free The contributions are treated as a distribution of money and are not included in the partner's gross income. Efile state taxes for free Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are deductible by the partnership and includible in the partner's gross income. Efile state taxes for free In both situations, the partner can deduct the contribution made to the partner's HSA. Efile state taxes for free Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are deductible by the S corporation and includible in the shareholder-employee's gross income. Efile state taxes for free The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. Efile state taxes for free Form 8889. Efile state taxes for free   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. Efile state taxes for free Contributions made by your employer and qualified HSA funding distributions are also shown on the form. Efile state taxes for free   You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to your HSA during the year. Efile state taxes for free Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. Efile state taxes for free Follow the instructions for Form 8889. Efile state taxes for free Report your HSA deduction on Form 1040 or Form 1040NR. Efile state taxes for free Excess contributions. Efile state taxes for free   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. Efile state taxes for free Excess contributions are not deductible. Efile state taxes for free Excess contributions made by your employer are included in your gross income. Efile state taxes for free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Efile state taxes for free   Generally, you must pay a 6% excise tax on excess contributions. Efile state taxes for free See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Efile state taxes for free The excise tax applies to each tax year the excess contribution remains in the account. Efile state taxes for free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Efile state taxes for free You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. Efile state taxes for free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Efile state taxes for free If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income is not an excess contribution. Efile state taxes for free If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. Efile state taxes for free Deducting an excess contribution in a later year. Efile state taxes for free   You may be able to deduct excess contributions for previous years that are still in your HSA. Efile state taxes for free The excess contribution you can deduct for the current year is the lesser of the following two amounts. Efile state taxes for free Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. Efile state taxes for free The total excess contributions in your HSA at the beginning of the year. Efile state taxes for free   Amounts contributed for the year include contributions by you, your employer, and any other person. Efile state taxes for free They also include any qualified HSA funding distribution made to your HSA. Efile state taxes for free Any excess contribution remaining at the end of a tax year is subject to the excise tax. Efile state taxes for free See Form 5329. Efile state taxes for free Distributions From an HSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Efile state taxes for free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your HSA to send you a distribution from your HSA. Efile state taxes for free You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. Efile state taxes for free If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Efile state taxes for free You do not have to make distributions from your HSA each year. Efile state taxes for free If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Efile state taxes for free Generally, a distribution is money you get from your health savings account. Efile state taxes for free Your total distributions include amounts paid with a debit card that restricts payments to health care and amounts withdrawn from the HSA by other individuals that you have designated. Efile state taxes for free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Efile state taxes for free Qualified medical expenses. Efile state taxes for free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Efile state taxes for free These are explained in Publication 502, Medical and Dental Expenses. Efile state taxes for free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. Efile state taxes for free A medicine or drug will be a qualified medical expense for HSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Efile state taxes for free   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. Efile state taxes for free State law determines when an HSA is established. Efile state taxes for free An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. Efile state taxes for free   If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses. Efile state taxes for free   Qualified medical expenses are those incurred by the following persons. Efile state taxes for free You and your spouse. Efile state taxes for free All dependents you claim on your tax return. Efile state taxes for free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Efile state taxes for free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Efile state taxes for free You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA. Efile state taxes for free Insurance premiums. Efile state taxes for free   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. Efile state taxes for free Health care continuation coverage (such as coverage under COBRA). Efile state taxes for free Health care coverage while receiving unemployment compensation under federal or state law. Efile state taxes for free Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). Efile state taxes for free   The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. Efile state taxes for free See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). Efile state taxes for free   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. Efile state taxes for free For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses. Efile state taxes for free Health coverage tax credit. Efile state taxes for free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. Efile state taxes for free See Publication 502 for more information on this credit. Efile state taxes for free Deemed distributions from HSAs. Efile state taxes for free   The following situations result in deemed taxable distributions from your HSA. Efile state taxes for free You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. Efile state taxes for free Your account ceases to be an HSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8889. Efile state taxes for free You used any portion of any of your HSAs as security for a loan at any time in 2013. Efile state taxes for free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Efile state taxes for free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the HSA, Lending of money between you and the HSA, Furnishing goods, services, or facilities between you and the HSA, and Transfer to or use by you, or for your benefit, of any assets of the HSA. Efile state taxes for free   Any deemed distribution will not be treated as used to pay qualified medical expenses. Efile state taxes for free These distributions are included in your income and are subject to the additional 20% tax, discussed later. Efile state taxes for free Recordkeeping. Efile state taxes for free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Efile state taxes for free Do not send these records with your tax return. Efile state taxes for free Keep them with your tax records. Efile state taxes for free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Efile state taxes for free If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. Efile state taxes for free However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. Efile state taxes for free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Efile state taxes for free If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. Efile state taxes for free Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free You may have to pay an additional 20% tax on your taxable distribution. Efile state taxes for free HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. Efile state taxes for free Additional tax. Efile state taxes for free   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. Efile state taxes for free Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free Exceptions. Efile state taxes for free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Efile state taxes for free Balance in an HSA An HSA is generally exempt from tax. Efile state taxes for free You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Efile state taxes for free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Efile state taxes for free Earnings on amounts in an HSA are not included in your income while held in the HSA. Efile state taxes for free Death of HSA Holder You should choose a beneficiary when you set up your HSA. Efile state taxes for free What happens to that HSA when you die depends on whom you designate as the beneficiary. Efile state taxes for free Spouse is the designated beneficiary. Efile state taxes for free   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. Efile state taxes for free Spouse is not the designated beneficiary. Efile state taxes for free   If your spouse is not the designated beneficiary of your HSA: The account stops being an HSA, and The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. Efile state taxes for free If your estate is the beneficiary, the value is included on your final income tax return. Efile state taxes for free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Efile state taxes for free Filing Form 8889 You must file Form 8889 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your HSA during the year. Efile state taxes for free You must file the form even if only your employer or your spouse's employer made contributions to the HSA. Efile state taxes for free If, during the tax year, you are the beneficiary of two or more HSAs or you are a beneficiary of an HSA and you have your own HSA, you must complete a separate Form 8889 for each HSA. Efile state taxes for free Enter “statement” at the top of each Form 8889 and complete the form as instructed. Efile state taxes for free Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. Efile state taxes for free Attach the statements to your tax return after the controlling Form 8889. Efile state taxes for free Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. Efile state taxes for free Unlike the previous discussions, “you” refers to the employer and not to the employee. Efile state taxes for free Health plan. Efile state taxes for free   If you want your employees to be able to have an HSA, they must have an HDHP. Efile state taxes for free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Efile state taxes for free Contributions. Efile state taxes for free   You can make contributions to your employees' HSAs. Efile state taxes for free You deduct the contributions on your business income tax return for the year in which you make the contributions. Efile state taxes for free If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. Efile state taxes for free   For more information on employer contributions, see Notice 2008-59, 2008-29 I. Efile state taxes for free R. Efile state taxes for free B. Efile state taxes for free 123, questions 23 through 27, available at www. Efile state taxes for free irs. Efile state taxes for free gov/irb/2008-29_IRB/ar11. Efile state taxes for free html. Efile state taxes for free Comparable contributions. Efile state taxes for free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. Efile state taxes for free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Efile state taxes for free The comparability rules do not apply to contributions made through a cafeteria plan. Efile state taxes for free Comparable participating employees. Efile state taxes for free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an HSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (part-time, full-time, or former employees). Efile state taxes for free   To meet the comparability requirements for eligible employees who have not established an HSA by December 31 or have not notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. Efile state taxes for free   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. Efile state taxes for free The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that they have established an HSA will receive a comparable contribution to the HSA for the prior year. Efile state taxes for free For a sample of the notice, see Regulation 54. Efile state taxes for free 4980G-4 A-14(c). Efile state taxes for free You will meet the contribution requirement for these employees if by April 15, 2014, you contribute comparable amounts plus reasonable interest to the employee's HSA for the prior year. Efile state taxes for free Note. Efile state taxes for free For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. Efile state taxes for free Excise tax. Efile state taxes for free   If you made contributions to your employees' HSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Efile state taxes for free Employment taxes. Efile state taxes for free   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. Efile state taxes for free You must report the contributions in box 12 of the Form W-2 you file for each employee. Efile state taxes for free This includes the amounts the employee elected to contribute through a cafeteria plan. Efile state taxes for free Enter code “W” in box 12. Efile state taxes for free Medical Savings Accounts (MSAs) Archer MSAs were created to help self-employed individuals and employees of certain small employers meet the medical care costs of the account holder, the account holder's spouse, or the account holder's dependent(s). Efile state taxes for free After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless: You were an active participant for any tax year ending before January 1, 2008, or You became an active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer. Efile state taxes for free A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is eligible for Medicare. Efile state taxes for free Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. Efile state taxes for free S. Efile state taxes for free financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. Efile state taxes for free What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. Efile state taxes for free You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. Efile state taxes for free The interest or other earnings on the assets in your Archer MSA are tax free. Efile state taxes for free Distributions may be tax free if you pay qualified medical expenses. Efile state taxes for free See Qualified medical expenses , later. Efile state taxes for free The contributions remain in your Archer MSA from year to year until you use them. Efile state taxes for free An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. Efile state taxes for free Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. Efile state taxes for free An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse). Efile state taxes for free A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. Efile state taxes for free You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. Efile state taxes for free You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. Efile state taxes for free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. Efile state taxes for free This is true even if the other person does not actually claim your exemption. Efile state taxes for free Small employer. Efile state taxes for free   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. Efile state taxes for free The definition of small employer is modified for new employers and growing employers. Efile state taxes for free Growing employer. Efile state taxes for free   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. Efile state taxes for free The employer will continue to meet the requirement for small employers if he or she: Had 50 or fewer employees when the Archer MSAs began, Made a contribution that was excludable or deductible as an Archer MSA for the last year he or she had 50 or fewer employees, and Had an average of 200 or fewer employees each year after 1996. Efile state taxes for free Changing employers. Efile state taxes for free   If you change employers, your Archer MSA moves with you. Efile state taxes for free However, you may not make additional contributions unless you are otherwise eligible. Efile state taxes for free High deductible health plan (HDHP). Efile state taxes for free   To be eligible for an Archer MSA, you must be covered under an HDHP. Efile state taxes for free An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses. Efile state taxes for free Limits. Efile state taxes for free   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. Efile state taxes for free   Self-only coverage Family coverage Minimum annual deductible $2,150 $4,300 Maximum annual deductible $3,200 $6,450 Maximum annual out-of-pocket expenses $4,300 $7,850 Family plans that do not meet the high deductible rules. Efile state taxes for free   There are some family plans that have deductibles for both the family as a whole and for individual family members. Efile state taxes for free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. Efile state taxes for free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. Efile state taxes for free Example. Efile state taxes for free You have family health insurance coverage in 2013. Efile state taxes for free The annual deductible for the family plan is $5,500. Efile state taxes for free This plan also has an individual deductible of $2,000 for each family member. Efile state taxes for free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($4,300) for family coverage. Efile state taxes for free Other health coverage. Efile state taxes for free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. Efile state taxes for free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. Efile state taxes for free However, you can have additional insurance that provides benefits only for the following items. Efile state taxes for free Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. Efile state taxes for free A specific disease or illness. Efile state taxes for free A fixed amount per day (or other period) of hospitalization. Efile state taxes for free You can also have coverage (whether provided through insurance or otherwise) for the following items. Efile state taxes for free Accidents. Efile state taxes for free Disability. Efile state taxes for free Dental care. Efile state taxes for free Vision care. Efile state taxes for free Long-term care. Efile state taxes for free Contributions to an MSA Contributions to an Archer MSA must be made in cash. Efile state taxes for free You cannot contribute stock or other property to an Archer MSA. Efile state taxes for free Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. Efile state taxes for free (You do not pay tax on these contributions. Efile state taxes for free ) If your employer does not make contributions to your Archer MSA, or you are self-employed, you can make your own contributions to your Archer MSA. Efile state taxes for free Both you and your employer cannot make contributions to your Archer MSA in the same year. Efile state taxes for free You do not have to make contributions to your Archer MSA every year. Efile state taxes for free    If your spouse is covered by your HDHP and an excludable amount is contributed by your spouse's employer to an Archer MSA belonging to your spouse, you cannot make contributions to your own Archer MSA that year. Efile state taxes for free Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. Efile state taxes for free An income limit. Efile state taxes for free Annual deductible limit. Efile state taxes for free   You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan) to your Archer MSA. Efile state taxes for free You must have the HDHP all year to contribute the full amount. Efile state taxes for free If you do not qualify to contribute the full amount for the year, determine your annual deductible limit by using the worksheet in the Instructions for Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. Efile state taxes for free Example 1. Efile state taxes for free You have an HDHP for your family all year in 2013. Efile state taxes for free The annual deductible is $5,000. Efile state taxes for free You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. Efile state taxes for free Example 2. Efile state taxes for free You have an HDHP for your family for the entire months of July through December 2013 (6 months). Efile state taxes for free The annual deductible is $5,000. Efile state taxes for free You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. Efile state taxes for free If you and your spouse each have a family plan, you are treated as having family coverage with the lower annual deductible of the two health plans. Efile state taxes for free The contribution limit is split equally between you unless you agree on a different division. Efile state taxes for free Income limit. Efile state taxes for free   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. Efile state taxes for free   If you are self-employed, you cannot contribute more than your net self-employment income. Efile state taxes for free This is your income from self-employment minus expenses (including the deductible part of self-employment tax). Efile state taxes for free Example 1. Efile state taxes for free Noah Paul earned $25,000 from ABC Company in 2013. Efile state taxes for free Through ABC, he had an HDHP for his family for the entire year. Efile state taxes for free The annual deductible was $5,000. Efile state taxes for free He can contribute up to $3,750 to his Archer MSA (75% × $5,000). Efile state taxes for free He can contribute the full amount because he earned more than $3,750 at ABC. Efile state taxes for free Example 2. Efile state taxes for free Westley Lawrence is self-employed. Efile state taxes for free He had an HDHP for his family for the entire year in 2013. Efile state taxes for free The annual deductible was $5,000. Efile state taxes for free Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). Efile state taxes for free However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. Efile state taxes for free Therefore, he is limited to a contribution of $2,500. Efile state taxes for free Individuals enrolled in Medicare. Efile state taxes for free   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. Efile state taxes for free However, you may be eligible for a Medicare Advantage MSA, discussed later. Efile state taxes for free When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. Efile state taxes for free Reporting Contributions on Your Return Report all contributions to your Archer MSA on Form 8853 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. Efile state taxes for free You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount you (or your employer) contributed during the year. Efile state taxes for free Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. Efile state taxes for free Follow the instructions for Form 8853 and complete the worksheet in the instructions. Efile state taxes for free Report your Archer MSA deduction on Form 1040 or Form 1040NR. Efile state taxes for free Excess contributions. Efile state taxes for free   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. Efile state taxes for free Excess contributions are not deductible. Efile state taxes for free Excess contributions made by your employer are included in your gross income. Efile state taxes for free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. Efile state taxes for free   Generally, you must pay a 6% excise tax on excess contributions. Efile state taxes for free See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. Efile state taxes for free The excise tax applies to each tax year the excess contribution remains in the account. Efile state taxes for free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. Efile state taxes for free You withdraw the excess contributions by the due date, including extensions, of your tax return. Efile state taxes for free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. Efile state taxes for free Deducting an excess contribution in a later year. Efile state taxes for free   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. Efile state taxes for free The excess contribution you can deduct in the current year is the lesser of the following two amounts. Efile state taxes for free Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. Efile state taxes for free The total excess contributions in your Archer MSA at the beginning of the year. Efile state taxes for free   Any excess contributions remaining at the end of a tax year are subject to the excise tax. Efile state taxes for free See Form 5329. Efile state taxes for free Distributions From an MSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. Efile state taxes for free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your Archer MSA to send you a distribution from your Archer MSA. Efile state taxes for free You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). Efile state taxes for free If you receive distributions for other reasons, the amount will be subject to income tax and may be subject to an additional 20% tax as well. Efile state taxes for free You do not have to make withdrawals from your Archer MSA each year. Efile state taxes for free If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. Efile state taxes for free A distribution is money you get from your Archer MSA. Efile state taxes for free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. Efile state taxes for free Qualified medical expenses. Efile state taxes for free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. Efile state taxes for free These are explained in Publication 502. Efile state taxes for free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. Efile state taxes for free A medicine or drug will be a qualified medical expense for MSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. Efile state taxes for free   Qualified medical expenses are those incurred by the following persons. Efile state taxes for free You and your spouse. Efile state taxes for free All dependents you claim on your tax return. Efile state taxes for free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. Efile state taxes for free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. Efile state taxes for free    You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your Archer MSA. Efile state taxes for free Special rules for insurance premiums. Efile state taxes for free   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. Efile state taxes for free You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law as qualified medical expenses for Archer MSAs. Efile state taxes for free Health coverage tax credit. Efile state taxes for free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. Efile state taxes for free See Publication 502 for information on this credit. Efile state taxes for free Deemed distributions from Archer MSAs. Efile state taxes for free   The following situations result in deemed taxable distributions from your Archer MSA. Efile state taxes for free You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. Efile state taxes for free Your account ceases to be an Archer MSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8853. Efile state taxes for free You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. Efile state taxes for free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. Efile state taxes for free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the Archer MSA, Lending of money between you and the Archer MSA, Furnishing goods, services, or facilities between you and the Archer MSA, and Transfer to or use by you, or for your benefit, of any assets of the Archer MSA. Efile state taxes for free   Any deemed distribution will not be treated as used to pay qualified medical expenses. Efile state taxes for free These distributions are included in your income and are subject to the additional 20% tax, discussed later. Efile state taxes for free Recordkeeping. Efile state taxes for free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. Efile state taxes for free Do not send these records with your tax return. Efile state taxes for free Keep them with your tax records. Efile state taxes for free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). Efile state taxes for free If you use a distribution from your Archer MSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8853. Efile state taxes for free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. Efile state taxes for free If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. Efile state taxes for free Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free You may have to pay an additional 20% tax, discussed later, on your taxable distribution. Efile state taxes for free If an amount (other than a rollover) is contributed to your Archer MSA this year (by you or your employer), you also must report and pay tax on a distribution you receive from your Archer MSA this year that is used to pay medical expenses of someone who is not covered by an HDHP, or is also covered by another health plan that is not an HDHP, at the time the expenses are incurred. Efile state taxes for free Rollovers. Efile state taxes for free   Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA is not taxable if you complete the rollover within 60 days. Efile state taxes for free An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. Efile state taxes for free See the Form 8853 instructions for more information. Efile state taxes for free Additional tax. Efile state taxes for free   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. Efile state taxes for free Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. Efile state taxes for free Report the additional tax in the total on Form 1040 or Form 1040NR. Efile state taxes for free Exceptions. Efile state taxes for free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. Efile state taxes for free Balance in an Archer MSA An Archer MSA is generally exempt from tax. Efile state taxes for free You are permitted to take a distribution from your Archer MSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. Efile state taxes for free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). Efile state taxes for free Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. Efile state taxes for free Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. Efile state taxes for free What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. Efile state taxes for free Spouse is the designated beneficiary. Efile state taxes for free   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. Efile state taxes for free Spouse is not the designated beneficiary. Efile state taxes for free   If your spouse is not the designated beneficiary of your Archer MSA: The account stops being an Archer MSA, and The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die. Efile state taxes for free   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. Efile state taxes for free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. Efile state taxes for free Filing Form 8853 You must file Form 8853 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your Archer MSA during the year. Efile state taxes for free You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. Efile state taxes for free If, during the tax year, you are the beneficiary of two or more Archer MSAs or you are a beneficiary of an Archer MSA and you have your own Archer MSA, you must complete a separate Form 8853 for each MSA. Efile state taxes for free Enter “statement” at the top of each Form 8853 and complete the form as instructed. Efile state taxes for free Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. Efile state taxes for free Attach the statements to your tax return after the controlling Form 8853. Efile state taxes for free Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. Efile state taxes for free Unlike the previous discussions, “you” refers to the employer and not to the employee. Efile state taxes for free Health plan. Efile state taxes for free   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. Efile state taxes for free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . Efile state taxes for free Contributions. Efile state taxes for free   You can make contributions to your employees' Archer MSAs. Efile state taxes for free You deduct the contributions on the “Employee benefit programs” line of your business income tax return for the year in which you make the contributions. Efile state taxes for free If you are filing Form 1040, Schedule C, this is Part II, line 14. Efile state taxes for free Comparable contributions. Efile state taxes for free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. Efile state taxes for free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. Efile state taxes for free Comparable participating employees. Efile state taxes for free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an Archer MSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (either part-time or full-time). Efile state taxes for free Excise tax. Efile state taxes for free   If you made contributions to your employees' Archer MSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. Efile state taxes for free Employment taxes. Efile state taxes for free   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. Efile state taxes for free You must report the contributions in box 12 of the Form W-2 you file for each employee. Efile state taxes for free Enter code “R” in box 12. Efile state taxes for free Medicare Advantage MSAs A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. Efile state taxes for free To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and have a high deductible health plan (HDHP) that meets the Medicare guidelines. Efile state taxes for free A Medicare Advantage MSA is a tax-exempt trust or custodial savings account that you set up with a financial institution (such as a bank or an insurance company) in which the Medicare program can deposit money for qualified medical expenses. Efile state taxes for free The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. Efile state taxes for free An HDHP is a special health insurance policy that has a high deductible. Efile state taxes for free You choose the policy you want to use as part of your Medicare Advantage MSA plan. Efile state taxes for free However, the policy must be approved by the Medicare program. Efile state taxes for free Medicare Advantage MSAs are administered through the federal Medicare program. Efile state taxes for free You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. Efile state taxes for free medicare. Efile state taxes for free gov. Efile state taxes for free Note. Efile state taxes for free You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. Efile state taxes for free Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. Efile state taxes for free FSAs are usually funded through voluntary salary reduction agreements with your employer. Efile state taxes for free No employment or federal income taxes are deducted from your contribution. Efile state taxes for free The employer may also contribute. Efile state taxes for free Note. Efile state taxes for free Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for FSAs on your income tax return. Efile state taxes for free For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. Efile state taxes for free What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. Efile state taxes for free Contributions made by your employer can be excluded from your gross income. Efile state taxes for free No employment or federal income taxes are deducted from the contributions. Efile state taxes for free Withdrawals may be tax free if you pay qualified medical expenses. Efile state taxes for free See Qualified medical expenses , later. Efile state taxes for free You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. Efile state taxes for free Qualifying for an FSA Health FSAs are employer-established benefit plans. Efile state taxes for free These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. Efile state taxes for free Employers have complete flexibility to offer various combinations of benefits in designing their plan. Efile state taxes for free You do not have to be covered under any other health care plan to participate. Efile state taxes for free Self-employed persons are not eligible for an FSA. Efile state taxes for free Certain limitations may apply if you are a highly compensated participant or a key employee. Efile state taxes for free Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. Efile state taxes for free This is sometimes called a salary reduction agreement. Efile state taxes for free The employer may also contribute to your FSA if specified in the plan. Efile state taxes for free You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. Efile state taxes for free However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. Efile state taxes for free When To Contribute At the