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

TurboTax Federal Free Edition - File Taxes Online

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

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


© 2012 - 2018 All rights reserved.

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

H & R Block Free Tax Filing

Can You Refile Taxes1040ez 2011Amend A Tax ReturnTurbotax 1040xSearch Free Tax Usa2010 Tax Forms And InstructionsFiling 2006 Taxes Late FreeIrs Tax ReturnHr Block Tax CalculatorAmended 1040File State Taxes Online For Free1040 Tax Forms 2011What Is 1040xFree 2010 Turbotax2011 E-file2009 1040 Tax FormFederal Tax Amendment Form1040ez Tax Forms To Print1040x Amended Tax FormTurbotax Login OnlineTax Preparation SoftwareCan Ie File An Amended Tax ReturnHttps Efile State Tax FreeFree Self Tax Preparation Online1040ez FormWww Myfreetaxes Com SandiegoAmend A Tax Return 2012Mypay Dfas MilFree Tax FileTax PreparationState Franchise Tax FormsTaxs 20121040ez Tax Forms To PrintMy Free TaxFree Fed And State Tax Filing1040nr Ez 20122006 Tax Software Free Download2010 1040 Tax FormWhere Do I Send My 1040xHow To File An Amended Tax Return 2013

H & R Block Free Tax Filing

H & r block free tax filing Some employees may be able to deduct certain work-related expenses. The following facts from the IRS can help you determine which expenses are deductible as an employee business expense. You must be itemizing deductions on IRS Schedule A to qualify. H & r block free tax filing Expenses that qualify for an itemized deduction generally include: H & r block free tax filing Business travel away from home H & r block free tax filing Business use of your car H & r block free tax filing Business meals and entertainment H & r block free tax filing Travel H & r block free tax filing Use of your home H & r block free tax filing Education H & r block free tax filing Supplies H & r block free tax filing Tools H & r block free tax filing Miscellaneous expenses H & r block free tax filing You must keep records to prove the business expenses you deduct. For general information on recordkeeping, see IRS Publication 552, Recordkeeping for Individuals available on this website, or by calling 1-800-TAX-FORM (800-829-3676). H & r block free tax filing If your employer reimburses you under an accountable plan, you should not include the payments in your gross income, and you may not deduct any of the reimbursed amounts. H & r block free tax filing An accountable plan must meet three requirements: H & r block free tax filing You must have paid or incurred expenses that are deductible while performing services as an employee. H & r block free tax filing H & r block free tax filing You must adequately account to your employer for these expenses within a reasonable time period. H & r block free tax filing H & r block free tax filing You must return any excess reimbursement or allowance within a reasonable time period. H & r block free tax filing If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses. H & r block free tax filing Generally, you report unreimbursed expenses on IRS Form 2106 or IRS Form 2106-EZ and attach it to Form 1040. Deductible expenses are then reported on IRS Schedule A, as a miscellaneous itemized deduction subject to a rule that limits your employee business expenses deduction to the amount that exceeds 2 percent of your adjusted gross income. H & r block free tax filing For more information see IRS Publication 529, Miscellaneous Deductions, which is available on this website, or by calling 1-800-TAX-FORM (800-829-3676). H & r block free tax filing
Print - Click this link to Print this page

IRS Opens Online FATCA Registration System

IR-2013-69, Aug. 19, 2013

WASHINGTON — The Internal Revenue Service today announced the opening of a new online registration system for financial institutions that need to register with the IRS under the Foreign Account Tax Compliance Act (FATCA).

Financial institutions that must register with the IRS to meet their FATCA obligations can now begin the process of registering by creating an account and providing required information. Financial institutions will also be able to provide required information for their branches of operation and other members of their expanded affiliate groups in which the financial institution is the lead organization.

The registration system, designed to enable secure account management, is a web-based application with around-the-clock availability.

Within a secure environment, the new registration system enables financial institutions to:

  • establish online accounts;
  • customize home pages to manage accounts;
  • designate points of contact to handle registrations;
  • oversee member and/or branch information; and
  • receive automatic notifications of status changes.

Financial institutions are encouraged to become familiar with the system, create their online accounts and begin submitting their information. Starting in January 2014, financial institutions will be expected to finalize their registration information by logging into their accounts, making any necessary changes and submitting the information as final.

As registrations are finalized and approved in 2014, registering financial institutions will receive a notice of registration acceptance and will be issued a global intermediary identification number.

The IRS will electronically post the first IRS Foreign Financial Institution (FFI) List in June 2014, and will update the list monthly. To ensure inclusion in the June 2014 IRS FFI List, financial institutions will need to finalize their registrations by April 25, 2014. 

Access to the FATCA registration system and related support information can be found on the FATCA page of IRS.gov.

Follow the IRS on New Media
Subscribe to IRS Newswire

Page Last Reviewed or Updated: 04-Sep-2013

The H & R Block Free Tax Filing

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