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

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ID Theft: IRS Efforts on Identity Theft

FS-2014-1, January 2014

Stopping identity theft and refund fraud is a top priority for the Internal Revenue Service (IRS). The agency’s work on identity theft and refund fraud continues to grow, touching nearly every part of the organization. For the 2014 filing season, the IRS has expanded these efforts to better protect taxpayers and help victims.

The IRS assigned more than 3,000 IRS employees to work on identity theft-related issues. IRS employees are working to prevent refund fraud, investigate identity theft-related crimes and help taxpayers who have been victimized by identity thieves. In addition, the IRS provides training to more than 35,000 employees who work with taxpayers to recognize identity theft indicators and help people victimized by identity theft.

Refund Fraud Detection and Prevention

The IRS continues to increase its efforts against refund fraud, which includes identity theft. As a result of these aggressive efforts to combat identity theft from 2011 through November 2013, the IRS has stopped 14.6 million suspicious returns, and protected over $50 billion in fraudulent refunds.

For 2014, the IRS will continue to increase both the number and efficiency of the identity theft filters that are used to identify potentially fraudulent returns due to identity theft prior to the processing of the return and release of any refund. 

In Fiscal Year 2013, the IRS initiated 1,492 identity theft related criminal investigations, an increase of 66 percent over investigations initiated in FY 2012. Indictments and sentencing doubled in FY 2013 and the average prison term was more than three years (38 months) – the longest sentenced being 26 years.   

Increasing Efforts to Help Victims

The IRS understands that identity theft is a frustrating, complex process for victims. While identity thieves steal information from sources outside the tax system, the IRS is often the first to inform a victim that identity theft has occurred. The IRS is working hard to resolve identity theft cases as quickly as possible.  We are also developing programs and information to protect the taxpayer from future misuse of their personal information impacting their tax administration and minimize the impact outside of IRS.

While the IRS has made considerable progress in this area, more work remains. Fighting identity theft is an ongoing battle as identity thieves continue to create new ways of stealing personal information and using it for their gain. Identity theft cases are among the most complex handled by the IRS. The IRS is continually reviewing processes and policies to minimize the incidence of identity theft and to help those who find themselves victimized. Among the steps underway to help victims:

  • IP PIN expansion. The IRS Identity Protection PIN (IP PIN) is a unique six digit number that is assigned annually to victims of identity theft for use when filing their federal tax return that shows that a particular taxpayer is the rightful filer of the return. For the upcoming tax year 2013 filing season, the IRS expects to provide more than 1.2 million taxpayers with an IP PIN. For the second tax season in a row, the number of IP PINs has nearly doubled from the year before. The IP PIN will allow these individuals to avoid delays in filing returns and receiving refunds.
  • IP PIN Changes:
    • If an IP PIN is assigned to a taxpayer for their 2013 return, the IP PIN must be used on any delinquent 2011 and 2012 returns filed during the 2014 calendar year.
    • IRS is exploring the use of an online process through IRS.gov that will allow taxpayers who have an IP PIN requirement and lose their IP PIN to create an account and receive their original IP PIN online. 
  • Victim case resolution:  The IRS continues to dedicate more and more employees to resolution of victim cases. These are extremely complex cases to resolve, frequently touching on multiple issues and multiple tax years. Cases of resolving identity theft can be complicated by the thieves themselves contacting the IRS. The IRS is working hard to streamline its internal process, but much more work remains. A typical case can take 180 days to resolve, and the IRS is working to reduce that time period.
  • Service options. The IRS is providing information in several ways ranging from a special section on IRS.gov devoted to identity theft to a special phone number available for victims to obtain assistance and resource information for resolving tax issues. The IRS Identity Protection Specialized Unit is available at 1-800-908-4490.
  • More information is available on IRS.gov, including the Taxpayer Guide to Identity Theft.

IRS Criminal Investigation

In FY 2013, the IRS initiated 1,492 identity theft related criminal investigations, an increase of 66% over investigations initiated in FY 2012. Indictments and sentencing doubled in FY 2013 and the average prison term was more than three years (38 months).

In January 2013, the IRS conducted a coordinated and highly successful identity theft enforcement sweep.  The coast-to-coast effort against identity theft suspects led to 734 enforcement actions, including 298 indictments, informations, complaints and arrests.

The Law Enforcement Assistance Program, formerly known as the Identity Theft Pilot Disclosure Program, was expanded nationwide.  This program provides for the disclosure of federal tax return information associated with the accounts of known and suspected victims of identity theft with the express written consent of those victims.  There are currently more than 300 state/local law enforcement agencies from 35 states participating.  For FY 2013, more than 2,400 requests were received from state and local law enforcement agencies.

The Identity Theft Clearinghouse (ITC) continues to develop and refer identity theft refund fraud schemes to Criminal Investigation (CI) Field Offices for investigation.  For FY 2013, the ITC received over 1,400 identity theft related leads.  Those leads related to more than 391,000 tax returns claiming in excess of $1.3 billion dollars in potentially fraudulent federal income tax refunds. 

CI continues to be the lead agency or actively involved in more than 30 multi-regional task forces or working groups including state/local and federal law enforcement agencies solely focusing on identity theft.     

For more information, see the special identity theft section on IRS.gov and IRS Fact Sheet 2014-2, Tips for Taxpayers and Victims about Identity Theft and Tax Returns.

Page Last Reviewed or Updated: 07-Jan-2014

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Fill out 1040ez online Publication 554 - Introductory Material Table of Contents What's New Reminders IntroductionVolunteer Income Tax Assistance and Tax Counseling for the Elderly. Fill out 1040ez online Ordering forms and publications. Fill out 1040ez online Tax questions. Fill out 1040ez online What's New Alternative minimum tax exemption increased. Fill out 1040ez online  The AMT exemption amount has increased to $51,900 ($80,800 if married filing jointly or qualifying widow(er); $40,400 if married filing separately). Fill out 1040ez online Earned income credit. Fill out 1040ez online  The maximum amount of income you can earn and still get the credit has increased. Fill out 1040ez online You may be able to take the credit if you earn less than: $14,340 ($19,680 if married filing jointly), do not have a qualifying child, and are at least 25 years old and under 65, $37,870 ($43,210 if married filing jointly), and you have one qualifying child, $43,038 ($48,378 if married filing jointly), and you have two qualifying children, or $46,227 ($51,567 if married filing jointly), and you have three or more qualifying children. Fill out 1040ez online For more information, see Earned Income Credit , later. Fill out 1040ez online Exemption phaseout. Fill out 1040ez online  You lose at least part of the benefit of your exemptions if your adjusted gross income is above a certain amount. Fill out 1040ez online For 2013, the phaseout begins at $150,000 for married individuals filing separate returns; $250,000 for single individuals; $275,000 for heads of household; and $300,000 for married individuals filing joint returns or qualifying widow(er)s. Fill out 1040ez online For more information, see Phaseout of Exemptions in Publication 501. Fill out 1040ez online Limit on itemized deductions. Fill out 1040ez online   Beginning January 1, 2013, itemized deductions for taxpayers with adjusted gross incomes above $150,000 may be reduced. Fill out 1040ez online See Overall limitation , later. Fill out 1040ez online Medical and dental expenses. Fill out 1040ez online   Beginning January 1, 2013, taxpayers 65 and older can deduct only the part of their medical and dental expenses that exceed 7. Fill out 1040ez online 5% of their adjusted gross income (10% for taxpayers under 65). Fill out 1040ez online Same-sex marriages. Fill out 1040ez online  If you have a same-sex spouse whom you legally married in a state (or foreign country) that recognizes same-sex marriage, you and your spouse generally must use the married filing jointly or married filing separately filing status on your 2013 return, even if you and your spouse now live in a state (or foreign country) that does not recognize same-sex marriage. Fill out 1040ez online For more information, see Publication 501. Fill out 1040ez online Reminders Future developments. Fill out 1040ez online  For the latest information about developments related to Publication 554, such as legislation enacted after it was published, go to www. Fill out 1040ez online irs. Fill out 1040ez online gov/pub554. Fill out 1040ez online Tax return preparers. Fill out 1040ez online  Choose your preparer carefully. Fill out 1040ez online If you pay someone to prepare your return, the preparer is required, under the law, to sign the return and fill in the other blanks in the Paid Preparer's area of your return. Fill out 1040ez online Remember, however, that you are still responsible for the accuracy of every item entered on your return. Fill out 1040ez online If there is any underpayment, you are responsible for paying it, plus any interest and penalty that may be due. Fill out 1040ez online Sale of home by surviving spouse. Fill out 1040ez online  If you are an unmarried widow or widower, you may qualify to exclude up to $500,000 of any gain from the sale or exchange of your main home. Fill out 1040ez online For more information, see Sale of Home , later. Fill out 1040ez online Third party designee. Fill out 1040ez online  You can check the “Yes” box in the Third Party Designee area of your return to authorize the IRS to discuss your return with your preparer, a friend, family member, or any other person you choose. Fill out 1040ez online This allows the IRS to call the person you identified as your designee to answer any questions that may arise during the processing of your return. Fill out 1040ez online It also allows your designee to perform certain actions. Fill out 1040ez online See your income tax return instructions for details. Fill out 1040ez online Employment tax withholding. Fill out 1040ez online  Your wages are subject to withholding for income tax, social security tax, and Medicare tax even if you are receiving social security benefits. Fill out 1040ez online Photographs of missing children. Fill out 1040ez online  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Fill out 1040ez online Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. Fill out 1040ez online You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. Fill out 1040ez online Introduction The purpose of this publication is to provide a general overview of selected topics that are of interest to older taxpayers. Fill out 1040ez online The publication will help you determine if you need to file a return and, if so, what items to report on your return. Fill out 1040ez online Each topic is discussed only briefly, so you will find references to other free IRS publications that provide more detail on these topics if you need it. Fill out 1040ez online Table I has a list of questions you may have about filing your federal tax return. Fill out 1040ez online To the right of each question is the location of the answer in this publication. Fill out 1040ez online Also, at the back of this publication there is an index to help you search for the topic you need. Fill out 1040ez online While most federal income tax laws apply equally to all taxpayers, regardless of age, there are some provisions that give special treatment to older taxpayers. Fill out 1040ez online The following are some examples. Fill out 1040ez online Higher gross income threshold for filing. Fill out 1040ez online You must be age 65 or older at the end of the year to get this benefit. Fill out 1040ez online You are considered age 65 on the day before your 65th birthday. Fill out 1040ez online Therefore, you are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Fill out 1040ez online Higher standard deduction. Fill out 1040ez online If you do not itemize deductions, you are entitled to a higher standard deduction if you are age 65 or older at the end of the year. Fill out 1040ez online You are considered age 65 at the end of the year if your 65th birthday is on or before January 1 of the following year. Fill out 1040ez online Credit for the elderly or the disabled. Fill out 1040ez online If you qualify, you may benefit from the credit for the elderly or the disabled. Fill out 1040ez online To determine if you qualify and how to figure this credit, see Credit for the Elderly or the Disabled , later. Fill out 1040ez online Return preparation assistance. Fill out 1040ez online   The IRS wants to make it easier for you to file your federal tax return. Fill out 1040ez online You may find it helpful to visit a Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), or American Association of Retired Persons (AARP) Tax-Aide site near you. Fill out 1040ez online Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Fill out 1040ez online   These programs provide free help for low-income taxpayers and taxpayers age 60 or older to fill in and file their returns. Fill out 1040ez online For the VITA/TCE site nearest you, contact your local IRS office. Fill out 1040ez online For more information, see Free help with your tax return under How To Get Tax Help. Fill out 1040ez online   For the location of an AARP Tax-Aide site in your community, call 1-888-227-7669. Fill out 1040ez online When asked, be ready to press in or speak your 5-digit ZIP code. Fill out 1040ez online Or, you can visit their website on the Internet at www. Fill out 1040ez online aarp. Fill out 1040ez online org/money/taxaide. Fill out 1040ez online Comments and suggestions. Fill out 1040ez online   We welcome your comments about this publication and your suggestions for future editions. Fill out 1040ez online   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Fill out 1040ez online NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Fill out 1040ez online Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Fill out 1040ez online   You can send your comments from www. Fill out 1040ez online irs. Fill out 1040ez online gov/formspubs/. Fill out 1040ez online Click on “More Information” and then on “Comment on Tax Forms and Publications. Fill out 1040ez online ”   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. Fill out 1040ez online Ordering forms and publications. Fill out 1040ez online   Visit www. Fill out 1040ez online irs. Fill out 1040ez online gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 business days after your request is received. Fill out 1040ez online Internal Revenue Service 1201 N. Fill out 1040ez online Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. Fill out 1040ez online   If you have a tax question, check the information available on IRS. Fill out 1040ez online gov or call 1-800-829-1040. Fill out 1040ez online We cannot answer tax questions sent to either of the above addresses. Fill out 1040ez online Table I. Fill out 1040ez online What You Should Know About Federal Taxes Note. Fill out 1040ez online The following is a list of questions you may have about filling out your federal income tax return. Fill out 1040ez online  To the right of each question is the location of the answer in this publication. Fill out 1040ez online What I Should Know Where To Find the Answer Do I need to file a return? See chapter 1. Fill out 1040ez online Is my income taxable or nontaxable?  If it is nontaxable, must I still report it? See chapter 2. Fill out 1040ez online How do I report benefits I received from the Social Security Administration or the Railroad Retirement Board?  Are these benefits taxable? See Social Security and Equivalent Railroad Retirement Benefits in chapter 2. Fill out 1040ez online Must I report the sale of my home?  If I had a gain, is any part of it taxable? See Sale of Home in chapter 2. Fill out 1040ez online What are some of the items that I can deduct to reduce my income? See chapters 3 and 4. Fill out 1040ez online How do I report the amounts I set aside for my IRA? See Individual Retirement Arrangement (IRA) Contributions and Deductions in chapter 3. Fill out 1040ez online Would it be better for me to claim the standard deduction or itemize my deductions? See chapter 4. Fill out 1040ez online What are some of the credits I can claim to reduce my tax? See chapter 5 for discussions on the credit for the elderly or the disabled, the child and dependent care credit, and the earned income credit. Fill out 1040ez online Must I make estimated tax payments? See chapter 6. Fill out 1040ez online How do I contact the IRS or get more information? See chapter 7. Fill out 1040ez online Prev  Up  Next   Home   More Online Publications