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1040ez forms download free 14. 1040ez forms download free   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Fuels Used in FarmingBuyer of fuel, including undyed diesel fuel or undyed kerosene. 1040ez forms download free Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). 1040ez forms download free Custom application of fertilizer and pesticide. 1040ez forms download free Fuel not used for farming. 1040ez forms download free Dyed Diesel Fuel and Dyed Kerosene Fuels Used in Off-Highway Business Use Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines How To Claim a Credit or RefundCredit only. 1040ez forms download free Claiming a Credit Claiming a Refund Including the Credit or Refund in Income Introduction You may be eligible to claim a credit on your income tax return for the federal excise tax on certain fuels. 1040ez forms download free You may also be eligible to claim a quarterly refund of the fuel taxes during the year, instead of waiting to claim a credit on your income tax return. 1040ez forms download free Whether you can claim a credit or refund depends on whether the fuel was taxed and the purpose (nontaxable use) for which you used the fuel. 1040ez forms download free The nontaxable uses of fuel for which a farmer may claim a credit or refund are generally the following. 1040ez forms download free Use on a farm for farming purposes. 1040ez forms download free Off-highway business use. 1040ez forms download free Uses other than as a fuel in a propulsion engine, such as home use. 1040ez forms download free Table 14-1 presents an overview of credits and refunds that may be claimed for fuels used for the nontaxable uses listed above. 1040ez forms download free See Publication 510, Excise Taxes, for more information. 1040ez forms download free Topics - This chapter discusses: Fuels used in farming Dyed diesel fuel and dyed kerosene Fuels used in off-highway business use Fuels used for household purposes How to claim a credit or refund Including the credit or refund in income Useful Items - You may want to see: Publication 510 Excise Taxes Form (and Instructions) 720 Quarterly Federal Excise Tax Return 4136 Credit for Federal Tax Paid on Fuels 8849 Claim for Refund of Excise Taxes See chapter 16 for information about getting publications and forms. 1040ez forms download free Fuels Used in Farming Owners, operators, and tenants of farms and certain other persons may be eligible to claim a credit or refund of excise taxes on fuel used in the trade or business of farming, when used on a farm in the United States for farming purposes. 1040ez forms download free See Table 14-1 for a list of available fuel tax credits and refunds. 1040ez forms download free Fuel is used on a farm for farming purposes only if used in carrying on a trade or business of farming, on a farm in the United States, and for farming purposes. 1040ez forms download free Farm. 1040ez forms download free   A farm includes livestock, dairy, fish, poultry, fruit, fur-bearing animals, and truck farms, orchards, plantations, ranches, nurseries, ranges, and feed yards for finishing cattle. 1040ez forms download free It also includes structures such as greenhouses used primarily for raising agricultural or horticultural commodities. 1040ez forms download free A fish farm is an area where fish are grown or raised and not merely caught or harvested. 1040ez forms download free Table 14-1. 1040ez forms download free Fuel Tax Credits and Refunds at a Glance Use this table to see if you can take a credit or refund for a nontaxable use of the fuel listed. 1040ez forms download free Fuel Used On a Farm for Farming Purposes Off-Highway Business Use Household Use or Use Other Than as a Fuel1 Gasoline Credit only Credit or refund None Aviation gasoline Credit only None None Undyed diesel fuel and undyed kerosene Credit or refund Credit or refund2 Credit or refund2 Kerosene for use in aviation Credit or refund None None Dyed diesel fuel and dyed kerosene None None None Other Fuels (including alternative fuels)3 Credit or refund Credit or refund None 1For a use other than as fuel in a propulsion engine. 1040ez forms download free 2Applies to undyed kerosene not sold from a blocked pump or, under certain circumstances, for blending with undyed diesel fuel to be used for heating purposes. 1040ez forms download free See Reg. 1040ez forms download free 48. 1040ez forms download free 6427-10 (b)(1) for the definition of a blocked pump. 1040ez forms download free 3Other Fuels means any liquid except gas oil, fuel oil, or any product taxable under Internal Revenue Code section 4081. 1040ez forms download free It includes the alternative fuels: liquefied petroleum gas (LPG),“P” Series fuels, compressed natural gas (CNG), liquefied hydrogen, any liquid fuel derived from coal (including peat) through the Fischer-Tropsch process, liquid fuel derived from biomass, liquid natural gas (LNG), liquefied gas derived from biomass, and compressed gas derived from biomass. 1040ez forms download free Farming purposes. 1040ez forms download free   As the owner, tenant, or operator and the ultimate purchaser of fuel that you purchased, you use the fuel on a farm for farming purposes if you use it in any of the following ways. 1040ez forms download free To cultivate the soil or to raise or harvest any agricultural or horticultural commodity. 1040ez forms download free To raise, shear, feed, care for, train, or manage livestock, bees, poultry, fur-bearing animals, or wildlife. 1040ez forms download free To operate, manage, conserve, improve, or maintain your farm and its tools and equipment. 1040ez forms download free To handle, dry, pack, grade, or store any raw agricultural or horticultural commodity. 1040ez forms download free For this use to qualify, you must have produced more than half the commodity so treated during the tax year. 1040ez forms download free The more-than-one-half test applies separately to each commodity. 1040ez forms download free Commodity means a single raw product. 1040ez forms download free For example, apples and peaches are two separate commodities. 1040ez forms download free To plant, cultivate, care for, or cut trees or to prepare (other than sawing logs into lumber, chipping, or other milling) trees for market, but only if these activities are incidental to your farming operations. 1040ez forms download free Your tree operations are incidental only if they are minor in nature when compared to the total farming operations. 1040ez forms download free   If any other person, such as a neighbor or custom operator (independent contractor), performs a service for you on your farm for any of the purposes included in list items (1) or (2), above, you are considered to be the ultimate purchaser who used the fuel on a farm for farming purposes. 1040ez forms download free Therefore, you can still claim the credit or refund for the fuel so used. 1040ez forms download free However, see Custom application of fertilizer and pesticide, later. 1040ez forms download free If the other person performs any other services for you on your farm for purposes not included in list items (1) or (2) above, no one can claim the credit or refund for fuel used on your farm for those other services. 1040ez forms download free Buyer of fuel, including undyed diesel fuel or undyed kerosene. 1040ez forms download free   If doubt exists whether the owner, tenant, or operator of the farm bought the fuel, determine who actually bore the cost of the fuel. 1040ez forms download free For example, if the owner of a farm and his or her tenant equally share the cost of gasoline used on the farm, each can claim a credit for the tax on half the fuel used. 1040ez forms download free Undyed diesel fuel, undyed kerosene, and Other Fuels (including alternative fuel). 1040ez forms download free   Usually, the farmer is the only person who can make a claim for credit or refund for the tax on undyed diesel fuel, undyed kerosene, or other fuels (including alternative fuel) used for farming purposes. 1040ez forms download free However, see Custom application of fertilizer and pesticide, next. 1040ez forms download free Also see Dyed Diesel Fuel and Dyed Kerosene, later. 1040ez forms download free Example. 1040ez forms download free Farm owner Haleigh Blue hired custom operator Tyler Steele to cultivate the soil on her farm. 1040ez forms download free Tyler used 200 gallons of undyed diesel fuel that he purchased to perform the work on Haleigh's farm. 1040ez forms download free In addition, Haleigh hired contractor Lee Brown to pack and store her apple crop. 1040ez forms download free Lee bought 25 gallons of undyed diesel fuel to use in packing the apples. 1040ez forms download free Haleigh can claim the credit for the 200 gallons of undyed diesel fuel used by Tyler on her farm because it qualifies as fuel used on the farm for farming purposes. 1040ez forms download free No one can claim a credit for the 25 gallons used by Lee because that fuel was not used for a farming purpose included in list items (1) or (2), above. 1040ez forms download free In the above example, both Tyler Steele and Lee Brown could have purchased dyed (untaxed) diesel fuel for their tasks. 1040ez forms download free Custom application of fertilizer and pesticide. 1040ez forms download free   Fuel used on a farm for farming purposes includes fuel used in the application (including aerial application) of fertilizer, pesticides, or other substances. 1040ez forms download free Generally, the applicator is treated as having used the fuel on a farm for farming purposes. 1040ez forms download free For applicators using highway vehicles, only the fuel used on the farm is exempt. 1040ez forms download free Fuel used traveling on the highway to and from the farm is taxable. 1040ez forms download free Fuel used by an aerial applicator for the direct flight between the airfield and one or more farms is treated as used for a farming purpose. 1040ez forms download free For aviation gasoline, the aerial applicator makes the claim as the ultimate purchaser. 1040ez forms download free For kerosene used in aviation, the ultimate purchaser may make the claim or waive the right to make the claim to the registered ultimate vendor. 1040ez forms download free A sample waiver is included as Model Waiver L in the appendix of Publication 510. 1040ez forms download free A registered ultimate vendor is the person who sells undyed diesel fuel, undyed kerosene, or kerosene for use in aviation to the user (ultimate purchaser) of the fuel for use on a farm for farming purposes. 1040ez forms download free To claim a credit or refund of tax, the ultimate vendor must be registered with the Internal Revenue Service at the time the claim is made. 1040ez forms download free However, registered ultimate vendors cannot make claims for undyed diesel fuel and undyed kerosene sold for use on a farm for farming purposes. 1040ez forms download free Fuel not used for farming. 1040ez forms download free   You do not use fuel on a farm for farming purposes when you use it in any of the following ways. 1040ez forms download free Off the farm, such as on the highway or in noncommercial aviation, even if the fuel is used in transporting livestock, feed, crops, or equipment. 1040ez forms download free For personal use, such as lawn mowing. 1040ez forms download free In processing, packaging, freezing, or canning operations. 1040ez forms download free In processing crude gum into gum spirits of turpentine or gum resin or in processing maple sap into maple syrup or maple sugar. 1040ez forms download free All-terrain vehicles (ATVs). 1040ez forms download free   Fuel used in ATVs on a farm for farming purposes, discussed earlier, is eligible for a credit or refund of excise taxes on the fuel. 1040ez forms download free Fuel used in ATVs for nonfarming purposes is not eligible for a credit or refund of the taxes. 1040ez forms download free If ATVs are used both for farming and nonfarming purposes, only that portion of the fuel used for farming purposes is eligible for the credit or refund. 1040ez forms download free Dyed Diesel Fuel and Dyed Kerosene If you purchase dyed diesel fuel or dyed kerosene for a nontaxable use, you must use it only on a farm for farming purposes or for other nontaxable purposes. 1040ez forms download free For example, you should not use dyed diesel fuel in a truck that is used both on the farm for farming purposes and on the highway, even though the highway use is in connection with farm business. 1040ez forms download free Excise tax applies to the fuel used by the truck on the highways. 1040ez forms download free In this situation, undyed (taxed) fuel should be purchased for the truck. 1040ez forms download free You should keep fuel records of the use of the truck on the farm for farming purposes, and for other uses. 1040ez forms download free You may be eligible for a credit or refund for the excise tax on fuel used on the farm for farming purposes. 1040ez forms download free Penalty. 1040ez forms download free   A penalty is imposed on any person who knowingly uses, sells, or alters dyed diesel fuel or dyed kerosene for any purpose other than a nontaxable use. 1040ez forms download free The penalty is the greater of $1,000 or $10 per gallon of the dyed diesel fuel or dyed kerosene involved. 1040ez forms download free After the first violation, the $1,000 portion of the penalty increases depending on the number of violations. 1040ez forms download free For more information on this penalty, see Publication 510. 1040ez forms download free Fuels Used in Off-Highway Business Use You may be eligible to claim a credit or refund for the excise tax on fuel used in an off-highway business use. 1040ez forms download free Off-highway business use. 1040ez forms download free   This is any use of fuel in a trade or business or in an income-producing activity. 1040ez forms download free The use must not be in a highway vehicle registered or required to be registered for use on public highways. 1040ez forms download free Off-highway business use generally does not include any use in a recreational motorboat. 1040ez forms download free Examples. 1040ez forms download free   Off-highway business use includes the use of fuels in a trade or business in any of the following ways. 1040ez forms download free In stationary machines such as generators, compressors, power saws, and similar equipment; For cleaning ; and In forklift trucks, bulldozers, and earthmovers. 1040ez forms download free   Off-highway nonbusiness (taxable) use of fuel includes: use in minibikes, snowmobiles, power lawn mowers, chain saws, and other yard equipment. 1040ez forms download free For more information, see Publication 510. 1040ez forms download free Fuels Used for Household Purposes or Other Than as a Fuel for Propulsion Engines You may be eligible to claim a credit or refund for the excise tax on undyed diesel fuel or kerosene used for home heating, lighting, and cooking. 1040ez forms download free This also applies to diesel fuel and kerosene used in a home generator to produce electricity for home use. 1040ez forms download free Home use of a fuel does not include use in a propulsion engine and it is not considered an off-highway business use. 1040ez forms download free How To Claim a Credit or Refund You may be able to claim a credit or refund of the excise tax on fuels you use for nontaxable uses. 1040ez forms download free The basic rules for claiming credits and refunds are listed in Table 14-2 . 1040ez forms download free Table 14-2. 1040ez forms download free Claiming a Credit or Refund of Excise Taxes This table gives the basic rules for claiming a credit or refund of excise taxes on fuels used for a nontaxable use. 1040ez forms download free   Credit Refund Which form to use Form 4136, Credit for Federal Tax Paid on Fuels Form 8849, Claim for Refund of Excise Taxes, and Schedule 1 (Form 8849), Nontaxable Use of Fuels Type of form Annual Quarterly When to file With your income tax return By the last day of the quarter following the last quarter included in the claim Amount of tax Any amount $750 or more1 1You may carry over an amount less than $750 to the next quarter. 1040ez forms download free Keep at your principal place of business all records needed to enable the IRS to verify that you are the person entitled to claim a credit or refund and the amount you claimed. 1040ez forms download free You do not have to use any special form, but the records should establish the following information. 1040ez forms download free The total number of gallons bought and used during the period covered by your claim. 1040ez forms download free The dates of the purchases. 1040ez forms download free The names and addresses of suppliers and amounts bought from each during the period covered by your claim. 1040ez forms download free The nontaxable use for which you used the fuel. 1040ez forms download free The number of gallons used for each nontaxable use. 1040ez forms download free It is important that your records separately show the number of gallons used for each nontaxable use that qualifies as a claim. 1040ez forms download free For more information about recordkeeping, see Publication 583, Starting a Business and Keeping Records. 1040ez forms download free Credit or refund. 1040ez forms download free   A credit is an amount that reduces the tax on your income tax return when you file it at the end of the year. 1040ez forms download free If you meet certain requirements, you may claim a refund during the year instead of waiting until you file your income tax return. 1040ez forms download free Credit only. 1040ez forms download free   You can claim the following taxes only as a credit on your income tax return. 1040ez forms download free Tax on gasoline and aviation gasoline you used on a farm for farming purposes. 1040ez forms download free Tax on fuels (including undyed diesel fuel or undyed kerosene) you used for nontaxable uses if the total for the tax year is less than $750. 1040ez forms download free Tax on fuel you did not include in any claim for refund previously filed for any quarter of the tax year. 1040ez forms download free Claiming a Credit You make a claim for a fuel tax credit on Form 4136 and attach it to your income tax return. 1040ez forms download free Do not claim a credit for any excise tax for which you have filed a refund claim. 1040ez forms download free How to claim a credit. 1040ez forms download free   How you claim a credit depends on whether you are an individual, partnership, corporation, S corporation, trust, or farmers' cooperative association. 1040ez forms download free Individuals. 1040ez forms download free   You claim the credit on the “Credit for federal tax on fuels” line of your Form 1040. 1040ez forms download free If you would not otherwise have to file an income tax return, you must do so to get a fuel tax credit. 1040ez forms download free Partnership. 1040ez forms download free   Partnerships (other than electing large partnerships) claim the credit by including a statement on Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. 1040ez forms download free , showing each partner's share of the number of gallons of each fuel sold or used for a nontaxable use, the type of use, and the applicable credit per gallon. 1040ez forms download free Each partner claims the credit on his or her income tax return for the partner's share of the fuel used by the partnership. 1040ez forms download free An electing large partnership can claim the credit on the “Other payments” line of Form 1065-B, U. 1040ez forms download free S. 1040ez forms download free Return of Income for Electing Large Partnerships. 1040ez forms download free Other entities. 1040ez forms download free   Corporations, S corporations, farmers' cooperative associations, and trusts make the claim on the appropriate line of their income tax return. 1040ez forms download free When to claim a credit. 1040ez forms download free   You can claim a fuel tax credit on your income tax return for the year you used the fuel. 1040ez forms download free You may be able to make a fuel tax claim on an amended income tax return for the year you used the fuel. 1040ez forms download free A claim for credit or refund of an overpayment must generally be filed within the later of: Three years from the date the original return was filed, or Two years from the date the tax was paid. 1040ez forms download free Claiming a Refund Generally, you may claim a refund of excise taxes on Form 8849. 1040ez forms download free Complete and attach to Form 8849 the appropriate Form 8849 schedule(s). 1040ez forms download free The instructions for Form 8849 and the separate instructions for each schedule explain the requirements for making a claim for refund. 1040ez forms download free If you file Form 720, you can use its Schedule C for your refund claims for the quarter. 1040ez forms download free See the Instructions for Form 720. 1040ez forms download free Do not claim a refund on Form 8849 for any amount for which you have filed or will file a claim on Form 720 or Form 4136. 1040ez forms download free You may file a claim for refund for any quarter of your tax year for which you can claim $750 or more. 1040ez forms download free This amount is the excise tax on all fuels used for a nontaxable use during that quarter or any prior quarter (for which no other claim has been filed) during the tax year. 1040ez forms download free If you cannot claim at least $750 at the end of a quarter, you carry the amount over to the next quarter of your tax year to determine if you can claim at least $750 for that quarter. 1040ez forms download free If you cannot claim at least $750 at the end of the fourth quarter of your tax year, you must claim a credit on your income tax return using Form 4136. 1040ez forms download free Only one claim can be filed for a quarter. 1040ez forms download free You cannot claim a refund for excise tax on gasoline and aviation gasoline used on a farm for farming purposes. 1040ez forms download free You must claim a credit on your income tax return for the tax. 1040ez forms download free How to file a quarterly claim. 1040ez forms download free   File the claim for refund by filling out Schedule 1 (Form 8849) and attaching it to Form 8849. 1040ez forms download free Send it to the address shown in the instructions. 1040ez forms download free If you file Form 720, you can use its Schedule C for your refund claims. 1040ez forms download free See the Instructions for Form 720. 1040ez forms download free When to file a quarterly claim. 1040ez forms download free   You must file a quarterly claim by the last day of the first quarter following the last quarter included in the claim. 1040ez forms download free If you do not file a timely refund claim for the fourth quarter of your tax year, you will have to claim a credit for that amount on your income tax return, as discussed earlier. 1040ez forms download free    In most situations, the amount claimed as a credit or refund will be less than the amount deducted as fuel tax expense because the Leaking Underground Storage Tank (LUST) tax of $0. 1040ez forms download free 001 per gallon is generally not subject to credit or refund. 1040ez forms download free Including the Credit or Refund in Income Include any credit or refund of excise taxes on fuels in your gross income if you claimed the total cost of the fuel (including the excise taxes) as an expense deduction that reduced your income tax liability. 1040ez forms download free Which year you include a credit or refund in gross income depends on whether you use the cash or an accrual method of accounting. 1040ez forms download free Cash method. 1040ez forms download free   If you use the cash method and file a claim for refund, include the refund amount in gross income for the tax year in which you receive the refund. 1040ez forms download free If you claim a credit on your income tax return, include the credit amount in gross income for the tax year in which you file Form 4136. 1040ez forms download free If you file an amended return and claim a credit, include the credit amount in gross income for the tax year in which you receive the credit. 1040ez forms download free Example. 1040ez forms download free Sharon Brown, a farmer who uses the cash method, filed her 2012 Form 1040 on March 3, 2013. 1040ez forms download free On her Schedule F, she deducted the total cost of gasoline (including $110 of excise taxes) used on the farm for farming purposes. 1040ez forms download free Then, on Form 4136, she claimed the $110 as a credit. 1040ez forms download free Sharon reports the $110 as other income on line 8b of her 2013 Schedule F. 1040ez forms download free Accrual method. 1040ez forms download free   If you use an accrual method, include the amount of credit or refund in gross income for the tax year in which you used the fuels. 1040ez forms download free It does not matter whether you filed for a quarterly refund or claimed the entire amount as a credit. 1040ez forms download free Example. 1040ez forms download free Patty Green, a farmer who uses the accrual method, files her 2012 Form 1040 on April 15, 2013. 1040ez forms download free On Schedule F, she deducts the total cost of gasoline (including $155 of excise taxes) she used on the farm for farming purposes during 2012. 1040ez forms download free On Form 4136, Patty claims the $155 as a credit. 1040ez forms download free She reports the $155 as other income on line 8b of her 2012 Schedule F. 1040ez forms download free Prev  Up  Next   Home   More Online Publications
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1040ez forms download free Publication 969 - Main Content Table of Contents Health Savings Accounts (HSAs)Qualifying for an HSA Contributions to an HSA Distributions From an HSA Balance in an HSA Death of HSA Holder Filing Form 8889 Employer Participation Medical Savings Accounts (MSAs)Archer MSAs Contributions to an MSA Distributions From an MSA Balance in an Archer MSA Death of the Archer MSA Holder Filing Form 8853 Employer Participation Medicare Advantage MSAs Flexible Spending Arrangements (FSAs)Qualifying for an FSA Contributions to an FSA Distributions From an FSA Balance in an FSA Employer Participation Health Reimbursement Arrangements (HRAs)Qualifying for an HRA Contributions to an HRA Distributions From an HRA Balance in an HRA Employer Participation How To Get Tax HelpLow Income Taxpayer Clinics Health Savings Accounts (HSAs) A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur. 1040ez forms download free You must be an eligible individual to qualify for an HSA. 1040ez forms download free No permission or authorization from the IRS is necessary to establish an HSA. 1040ez forms download free You set up an HSA with a trustee. 1040ez forms download free A qualified HSA trustee can be a bank, an insurance company, or anyone already approved by the IRS to be a trustee of individual retirement arrangements (IRAs) or Archer MSAs. 1040ez forms download free The HSA can be established through a trustee that is different from your health plan provider. 1040ez forms download free Your employer may already have some information on HSA trustees in your area. 1040ez forms download free If you have an Archer MSA, you can generally roll it over into an HSA tax free. 1040ez forms download free See Rollovers, later. 1040ez forms download free What are the benefits of an HSA?   You may enjoy several benefits from having an HSA. 1040ez forms download free You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form 1040. 1040ez forms download free Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. 1040ez forms download free The contributions remain in your account until you use them. 1040ez forms download free The interest or other earnings on the assets in the account are tax free. 1040ez forms download free Distributions may be tax free if you pay qualified medical expenses. 1040ez forms download free See Qualified medical expenses , later. 1040ez forms download free An HSA is “portable. 1040ez forms download free ” It stays with you if you change employers or leave the work force. 1040ez forms download free Qualifying for an HSA To be an eligible individual and qualify for an HSA, you must meet the following requirements. 1040ez forms download free You must be covered under a high deductible health plan (HDHP), described later, on the first day of the month. 1040ez forms download free You have no other health coverage except what is permitted under Other health coverage , later. 1040ez forms download free You are not enrolled in Medicare. 1040ez forms download free You cannot be claimed as a dependent on someone else's 2013 tax return. 1040ez forms download free Under the last-month rule, you are considered to be an eligible individual for the entire year if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers). 1040ez forms download free If you meet these requirements, you are an eligible individual even if your spouse has non-HDHP family coverage, provided your spouse's coverage does not cover you. 1040ez forms download free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an HSA contribution. 1040ez forms download free This is true even if the other person does not actually claim your exemption. 1040ez forms download free Each spouse who is an eligible individual who wants an HSA must open a separate HSA. 1040ez forms download free You cannot have a joint HSA. 1040ez forms download free High deductible health plan (HDHP). 1040ez forms download free   An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the sum of the annual deductible and out-of-pocket medical expenses that you must pay for covered expenses. 1040ez forms download free Out-of-pocket expenses include copayments and other amounts, but do not include premiums. 1040ez forms download free   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. 1040ez forms download free Preventive care includes, but is not limited to, the following. 1040ez forms download free Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. 1040ez forms download free Routine prenatal and well-child care. 1040ez forms download free Child and adult immunizations. 1040ez forms download free Tobacco cessation programs. 1040ez forms download free Obesity weight-loss programs. 1040ez forms download free Screening services. 1040ez forms download free This includes screening services for the following: Cancer. 1040ez forms download free Heart and vascular diseases. 1040ez forms download free Infectious diseases. 1040ez forms download free Mental health conditions. 1040ez forms download free Substance abuse. 1040ez forms download free Metabolic, nutritional, and endocrine conditions. 1040ez forms download free Musculoskeletal disorders. 1040ez forms download free Obstetric and gynecological conditions. 1040ez forms download free Pediatric conditions. 1040ez forms download free Vision and hearing disorders. 1040ez forms download free For more information on screening services, see Notice 2004-23, 2004-15 I. 1040ez forms download free R. 1040ez forms download free B. 1040ez forms download free 725 available at www. 1040ez forms download free irs. 1040ez forms download free gov/irb/2004-15_IRB/ar10. 1040ez forms download free html. 1040ez forms download free     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. 1040ez forms download free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,250 $12,500 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. 1040ez forms download free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. 1040ez forms download free    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. 1040ez forms download free      Self-only coverage Family coverage Minimum annual deductible $1,250 $2,500 Maximum annual deductible and other out-of-pocket expenses* $6,350 $12,700 * This limit does not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. 1040ez forms download free Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. 1040ez forms download free   Self-only HDHP coverage is an HDHP covering only an eligible individual. 1040ez forms download free Family HDHP coverage is an HDHP covering an eligible individual and at least one other individual (whether or not that individual is an eligible individual). 1040ez forms download free Example. 1040ez forms download free An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. 1040ez forms download free This is family HDHP coverage. 1040ez forms download free Family plans that do not meet the high deductible rules. 1040ez forms download free   There are some family plans that have deductibles for both the family as a whole and for individual family members. 1040ez forms download free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. 1040ez forms download free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. 1040ez forms download free Example. 1040ez forms download free You have family health insurance coverage in 2013. 1040ez forms download free The annual deductible for the family plan is $3,500. 1040ez forms download free This plan also has an individual deductible of $1,500 for each family member. 1040ez forms download free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($2,500) for family coverage. 1040ez forms download free Other health coverage. 1040ez forms download free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. 1040ez forms download free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. 1040ez forms download free    You can have additional insurance that provides benefits only for the following items. 1040ez forms download free Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. 1040ez forms download free A specific disease or illness. 1040ez forms download free A fixed amount per day (or other period) of hospitalization. 1040ez forms download free   You can also have coverage (whether provided through insurance or otherwise) for the following items. 1040ez forms download free Accidents. 1040ez forms download free Disability. 1040ez forms download free Dental care. 1040ez forms download free Vision care. 1040ez forms download free Long-term care. 1040ez forms download free    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. 1040ez forms download free For example, if your plan provides coverage substantially all of which is for a specific disease or illness, the plan is not an HDHP for purposes of establishing an HSA. 1040ez forms download free Prescription drug plans. 1040ez forms download free   You can have a prescription drug plan, either as part of your HDHP or a separate plan (or rider), and qualify as an eligible individual if the plan does not provide benefits until the minimum annual deductible of the HDHP has been met. 1040ez forms download free If you can receive benefits before that deductible is met, you are not an eligible individual. 1040ez forms download free Other employee health plans. 1040ez forms download free   An employee covered by an HDHP and a health FSA or an HRA that pays or reimburses qualified medical expenses generally cannot make contributions to an HSA. 1040ez forms download free Health FSAs and HRAs are discussed later. 1040ez forms download free   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. 1040ez forms download free Limited-purpose health FSA or HRA. 1040ez forms download free These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. 1040ez forms download free Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. 1040ez forms download free Suspended HRA. 1040ez forms download free Before the beginning of an HRA coverage period, you can elect to suspend the HRA. 1040ez forms download free The HRA does not pay or reimburse, at any time, the medical expenses incurred during the suspension period except preventive care and items listed under Other health coverage. 1040ez forms download free When the suspension period ends, you are no longer eligible to make contributions to an HSA. 1040ez forms download free Post-deductible health FSA or HRA. 1040ez forms download free These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. 1040ez forms download free The deductible for these arrangements does not have to be the same as the deductible for the HDHP, but benefits may not be provided before the minimum annual deductible amount is met. 1040ez forms download free Retirement HRA. 1040ez forms download free This arrangement pays or reimburses only those medical expenses incurred after retirement. 1040ez forms download free After retirement you are no longer eligible to make contributions to an HSA. 1040ez forms download free Health FSA – grace period. 1040ez forms download free   Coverage during a grace period by a general purpose health FSA is allowed if the balance in the health FSA at the end of its prior year plan is zero. 1040ez forms download free See Flexible Spending Arrangements (FSAs) , later. 1040ez forms download free Contributions to an HSA Any eligible individual can contribute to an HSA. 1040ez forms download free For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. 1040ez forms download free For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. 1040ez forms download free Family members or any other person may also make contributions on behalf of an eligible individual. 1040ez forms download free Contributions to an HSA must be made in cash. 1040ez forms download free Contributions of stock or property are not allowed. 1040ez forms download free Limit on Contributions The amount you or any other person can contribute to your HSA depends on the type of HDHP coverage you have, your age, the date you become an eligible individual, and the date you cease to be an eligible individual. 1040ez forms download free For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. 1040ez forms download free If you have family HDHP coverage, you can contribute up to $6,450. 1040ez forms download free For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. 1040ez forms download free If you have family HDHP coverage you can contribute up to $6,550. 1040ez forms download free If you were, or were considered (under the last-month rule, discussed later), an eligible individual for the entire year and did not change your type of coverage, you can contribute the full amount based on your type of coverage. 1040ez forms download free However, if you were not an eligible individual for the entire year or changed your coverage during the year, your contribution limit is the greater of: The limitation shown on the Line 3 Limitation Chart and Worksheetin the Instructions for Form 8889, Health Savings Accounts (HSAs), or The maximum annual HSA contribution based on your HDHP coverage (self-only or family) on the first day of the last month of your tax year. 1040ez forms download free If you had family HDHP coverage on the first day of the last month of your tax year, your contribution limit for 2013 is $6,450 even if you changed coverage during the year. 1040ez forms download free Last-month rule. 1040ez forms download free   Under the last-month rule, if you are an eligible individual on the first day of the last month of your tax year (December 1 for most taxpayers), you are considered an eligible individual for the entire year. 1040ez forms download free You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. 1040ez forms download free Testing period. 1040ez forms download free   If contributions were made to your HSA based on you being an eligible individual for the entire year under the last-month rule, you must remain an eligible individual during the testing period. 1040ez forms download free For the last-month rule, the testing period begins with the last month of your tax year and ends on the last day of the 12th month following that month. 1040ez forms download free For example, December 1, 2013, through December 31, 2014. 1040ez forms download free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the total contributions made to your HSA that would not have been made except for the last-month rule. 1040ez forms download free You include this amount in your income in the year in which you fail to be an eligible individual. 1040ez forms download free This amount is also subject to a 10% additional tax. 1040ez forms download free The income and additional tax are shown on Form 8889, Part III. 1040ez forms download free Example 1. 1040ez forms download free Chris, age 53, becomes an eligible individual on December 1, 2013. 1040ez forms download free He has family HDHP coverage on that date. 1040ez forms download free Under the last-month rule, he contributes $6,450 to his HSA. 1040ez forms download free Chris fails to be an eligible individual in June 2014. 1040ez forms download free Because Chris did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), he must include in his 2014 income the contributions made in 2013 that would not have been made except for the last-month rule. 1040ez forms download free Chris uses the worksheet in the Form 8889 instructions to determine this amount. 1040ez forms download free January -0- February -0- March -0- April -0- May -0- June -0- July -0- August -0- September -0- October -0- November -0- December $6,450. 1040ez forms download free 00 Total for all months $6,450. 1040ez forms download free 00 Limitation. 1040ez forms download free Divide the total by 12 $537. 1040ez forms download free 50 Chris would include $5,912. 1040ez forms download free 50 ($6,450. 1040ez forms download free 00 – $537. 1040ez forms download free 50) in his gross income on his 2014 tax return. 1040ez forms download free Also, a 10% additional tax applies to this amount. 1040ez forms download free Example 2. 1040ez forms download free Erika, age 39, has self-only HDHP coverage on January 1, 2013. 1040ez forms download free Erika changes to family HDHP coverage on November 1, 2013. 1040ez forms download free Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. 1040ez forms download free Erika fails to be an eligible individual in March 2014. 1040ez forms download free Because she did not remain an eligible individual during the testing period (December 1, 2013, through December 31, 2014), she must include in income the contribution made that would not have been made except for the last-month rule. 1040ez forms download free Erika uses the worksheet in the Form 8889 instructions to determine this amount. 1040ez forms download free January $3,250. 1040ez forms download free 00 February $3,250. 1040ez forms download free 00 March $3,250. 1040ez forms download free 00 April $3,250. 1040ez forms download free 00 May $3,250. 1040ez forms download free 00 June $3,250. 1040ez forms download free 00 July $3,250. 1040ez forms download free 00 August $3,250. 1040ez forms download free 00 September $3,250. 1040ez forms download free 00 October $3,250. 1040ez forms download free 00 November $6,450. 1040ez forms download free 00 December $6,450. 1040ez forms download free 00 Total for all months $45,400. 1040ez forms download free 00 Limitation. 1040ez forms download free Divide the total by 12 $3,783. 1040ez forms download free 34 Erika would include $2,666. 1040ez forms download free 67 ($6,450 – $3,783. 1040ez forms download free 34) in her gross income on her 2014 tax return. 1040ez forms download free Also, a 10% additional tax applies to this amount. 1040ez forms download free Additional contribution. 1040ez forms download free   If you are an eligible individual who is age 55 or older at the end of your tax year, your contribution limit is increased by $1,000. 1040ez forms download free For example, if you have self-only coverage, you can contribute up to $4,250 (the contribution limit for self-only coverage ($3,250) plus the additional contribution of $1,000). 1040ez forms download free However, see Enrolled in Medicare , later. 1040ez forms download free If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. 1040ez forms download free Reduction of contribution limit. 1040ez forms download free   You must reduce the amount that can be contributed (including any additional contribution) to your HSA by the amount of any contribution made to your Archer MSA (including employer contributions) for the year. 1040ez forms download free A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. 1040ez forms download free Rules for married people. 1040ez forms download free   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. 1040ez forms download free If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. 1040ez forms download free You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. 1040ez forms download free After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. 1040ez forms download free The rules for married people apply only if both spouses are eligible individuals. 1040ez forms download free If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. 1040ez forms download free If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. 1040ez forms download free Each spouse must make the additional contribution to his or her own HSA. 1040ez forms download free Example. 1040ez forms download free For 2013, Mr. 1040ez forms download free Auburn and his wife are both eligible individuals. 1040ez forms download free They each have family coverage under separate HDHPs. 1040ez forms download free Mr. 1040ez forms download free Auburn is 58 years old and Mrs. 1040ez forms download free Auburn is 53. 1040ez forms download free Mr. 1040ez forms download free and Mrs. 1040ez forms download free Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. 1040ez forms download free If they split it equally, Mr. 1040ez forms download free Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. 1040ez forms download free Auburn can contribute $3,225 to an HSA. 1040ez forms download free Employer contributions. 1040ez forms download free   You must reduce the amount you, or any other person, can contribute to your HSA by the amount of any contributions made by your employer that are excludable from your income. 1040ez forms download free This includes amounts contributed to your account by your employer through a cafeteria plan. 1040ez forms download free Enrolled in Medicare. 1040ez forms download free   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. 1040ez forms download free Example. 1040ez forms download free You turned age 65 in July 2013 and enrolled in Medicare. 1040ez forms download free You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. 1040ez forms download free Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). 1040ez forms download free Qualified HSA funding distribution. 1040ez forms download free   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. 1040ez forms download free This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. 1040ez forms download free For this purpose, a SEP IRA or SIMPLE IRA is ongoing if an employer contribution is made for the plan year ending with or within your tax year in which the distribution would be made. 1040ez forms download free   The maximum qualified HSA funding distribution depends on the HDHP coverage (self-only or family) you have on the first day of the month in which the contribution is made and your age as of the end of the tax year. 1040ez forms download free The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. 1040ez forms download free The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. 1040ez forms download free The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. 1040ez forms download free   You can make only one qualified HSA funding distribution during your lifetime. 1040ez forms download free However, if you make a distribution during a month when you have self-only HDHP coverage, you can make another qualified HSA funding distribution in a later month in that tax year if you change to family HDHP coverage. 1040ez forms download free The total qualified HSA funding distribution cannot be more than the contribution limit for family HDHP coverage plus any additional contribution to which you are entitled. 1040ez forms download free Example. 1040ez forms download free In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. 1040ez forms download free You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). 1040ez forms download free Funding distribution – testing period. 1040ez forms download free   You must remain an eligible individual during the testing period. 1040ez forms download free For a qualified HSA funding distribution, the testing period begins with the month in which the qualified HSA funding distribution is contributed and ends on the last day of the 12th month following that month. 1040ez forms download free For example, if a qualified HSA funding distribution is contributed to your HSA on August 10, 2013, your testing period begins in August 2013, and ends on August 31, 2014. 1040ez forms download free   If you fail to remain an eligible individual during the testing period, other than because of death or becoming disabled, you will have to include in income the qualified HSA funding distribution. 1040ez forms download free You include this amount in income in the year in which you fail to be an eligible individual. 1040ez forms download free This amount is also subject to a 10% additional tax. 1040ez forms download free The income and the additional tax are shown on Form 8889, Part III. 1040ez forms download free   Each qualified HSA funding distribution allowed has its own testing period. 1040ez forms download free For example, you are an eligible individual, age 45, with self-only HDHP coverage. 1040ez forms download free On June 18, 2013, you make a qualified HSA funding distribution of $3,250. 1040ez forms download free On July 27, 2013, you enroll in family HDHP coverage and on August 17, 2013, you make a qualified HSA funding distribution of $3,200. 1040ez forms download free Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. 1040ez forms download free Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. 1040ez forms download free   The testing period rule that applies under the last-month rule (discussed earlier) does not apply to amounts contributed to an HSA through a qualified HSA funding distribution. 1040ez forms download free If you remain an eligible individual during the entire funding distribution testing period, then no amount of that distribution is included in income and will not be subject to the additional tax for failing to meet the last-month rule testing period. 1040ez forms download free Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. 1040ez forms download free Archer MSAs and other HSAs. 1040ez forms download free   You can roll over amounts from Archer MSAs and other HSAs into an HSA. 1040ez forms download free You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. 1040ez forms download free Rollover contributions do not need to be in cash. 1040ez forms download free Rollovers are not subject to the annual contribution limits. 1040ez forms download free   You must roll over the amount within 60 days after the date of receipt. 1040ez forms download free You can make only one rollover contribution to an HSA during a 1-year period. 1040ez forms download free Note. 1040ez forms download free If you instruct the trustee of your HSA to transfer funds directly to the trustee of another of your HSAs, the transfer is not considered a rollover. 1040ez forms download free There is no limit on the number of these transfers. 1040ez forms download free Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. 1040ez forms download free When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. 1040ez forms download free If you fail to be an eligible individual during 2013, you can still make contributions, up until April 15, 2014, for the months you were an eligible individual. 1040ez forms download free Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. 1040ez forms download free Your employer must notify you and the trustee of your HSA that the contribution is for 2013. 1040ez forms download free The contribution will be reported on your 2014 Form W-2. 1040ez forms download free Reporting Contributions on Your Return Contributions made by your employer are not included in your income. 1040ez forms download free Contributions to an employee's account by an employer using the amount of an employee's salary reduction through a cafeteria plan are treated as employer contributions. 1040ez forms download free Generally, you can claim contributions you made and contributions made by any other person, other than your employer, on your behalf, as an adjustment to income. 1040ez forms download free Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. 1040ez forms download free The contributions are treated as a distribution of money and are not included in the partner's gross income. 1040ez forms download free Contributions by a partnership to a partner's HSA for services rendered are treated as guaranteed payments that are deductible by the partnership and includible in the partner's gross income. 1040ez forms download free In both situations, the partner can deduct the contribution made to the partner's HSA. 1040ez forms download free Contributions by an S corporation to a 2% shareholder-employee's HSA for services rendered are treated as guaranteed payments and are deductible by the S corporation and includible in the shareholder-employee's gross income. 1040ez forms download free The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. 1040ez forms download free Form 8889. 1040ez forms download free   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. 1040ez forms download free Contributions made by your employer and qualified HSA funding distributions are also shown on the form. 1040ez forms download free   You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount contributed to your HSA during the year. 1040ez forms download free Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. 1040ez forms download free Follow the instructions for Form 8889. 1040ez forms download free Report your HSA deduction on Form 1040 or Form 1040NR. 1040ez forms download free Excess contributions. 1040ez forms download free   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. 1040ez forms download free Excess contributions are not deductible. 1040ez forms download free Excess contributions made by your employer are included in your gross income. 1040ez forms download free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. 1040ez forms download free   Generally, you must pay a 6% excise tax on excess contributions. 1040ez forms download free See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. 1040ez forms download free The excise tax applies to each tax year the excess contribution remains in the account. 1040ez forms download free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. 1040ez forms download free You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. 1040ez forms download free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. 1040ez forms download free If you fail to remain an eligible individual during any of the testing periods, discussed earlier, the amount you have to include in income is not an excess contribution. 1040ez forms download free If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. 1040ez forms download free Deducting an excess contribution in a later year. 1040ez forms download free   You may be able to deduct excess contributions for previous years that are still in your HSA. 1040ez forms download free The excess contribution you can deduct for the current year is the lesser of the following two amounts. 1040ez forms download free Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. 1040ez forms download free The total excess contributions in your HSA at the beginning of the year. 1040ez forms download free   Amounts contributed for the year include contributions by you, your employer, and any other person. 1040ez forms download free They also include any qualified HSA funding distribution made to your HSA. 1040ez forms download free Any excess contribution remaining at the end of a tax year is subject to the excise tax. 1040ez forms download free See Form 5329. 1040ez forms download free Distributions From an HSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. 1040ez forms download free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your HSA to send you a distribution from your HSA. 1040ez forms download free You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. 1040ez forms download free If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. 1040ez forms download free You do not have to make distributions from your HSA each year. 1040ez forms download free If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. 1040ez forms download free Generally, a distribution is money you get from your health savings account. 1040ez forms download free Your total distributions include amounts paid with a debit card that restricts payments to health care and amounts withdrawn from the HSA by other individuals that you have designated. 1040ez forms download free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. 1040ez forms download free Qualified medical expenses. 1040ez forms download free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. 1040ez forms download free These are explained in Publication 502, Medical and Dental Expenses. 1040ez forms download free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. 1040ez forms download free A medicine or drug will be a qualified medical expense for HSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. 1040ez forms download free   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. 1040ez forms download free State law determines when an HSA is established. 1040ez forms download free An HSA that is funded by amounts rolled over from an Archer MSA or another HSA is established on the date the prior account was established. 1040ez forms download free   If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical expenses. 1040ez forms download free   Qualified medical expenses are those incurred by the following persons. 1040ez forms download free You and your spouse. 1040ez forms download free All dependents you claim on your tax return. 1040ez forms download free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040ez forms download free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. 1040ez forms download free You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your HSA. 1040ez forms download free Insurance premiums. 1040ez forms download free   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. 1040ez forms download free Health care continuation coverage (such as coverage under COBRA). 1040ez forms download free Health care coverage while receiving unemployment compensation under federal or state law. 1040ez forms download free Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). 1040ez forms download free   The premiums for long-term care insurance (item (1)) that you can treat as qualified medical expenses are subject to limits based on age and are adjusted annually. 1040ez forms download free See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). 1040ez forms download free   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. 1040ez forms download free For item (4), if you, the account beneficiary, are not 65 or older, Medicare premiums for coverage of your spouse or a dependent (who is 65 or older) generally are not qualified medical expenses. 1040ez forms download free Health coverage tax credit. 1040ez forms download free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. 1040ez forms download free See Publication 502 for more information on this credit. 1040ez forms download free Deemed distributions from HSAs. 1040ez forms download free   The following situations result in deemed taxable distributions from your HSA. 1040ez forms download free You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. 1040ez forms download free Your account ceases to be an HSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8889. 1040ez forms download free You used any portion of any of your HSAs as security for a loan at any time in 2013. 1040ez forms download free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. 1040ez forms download free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the HSA, Lending of money between you and the HSA, Furnishing goods, services, or facilities between you and the HSA, and Transfer to or use by you, or for your benefit, of any assets of the HSA. 1040ez forms download free   Any deemed distribution will not be treated as used to pay qualified medical expenses. 1040ez forms download free These distributions are included in your income and are subject to the additional 20% tax, discussed later. 1040ez forms download free Recordkeeping. 1040ez forms download free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. 1040ez forms download free Do not send these records with your tax return. 1040ez forms download free Keep them with your tax records. 1040ez forms download free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). 1040ez forms download free If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. 1040ez forms download free However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. 1040ez forms download free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. 1040ez forms download free If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. 1040ez forms download free Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free You may have to pay an additional 20% tax on your taxable distribution. 1040ez forms download free HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. 1040ez forms download free Additional tax. 1040ez forms download free   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. 1040ez forms download free Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free Exceptions. 1040ez forms download free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. 1040ez forms download free Balance in an HSA An HSA is generally exempt from tax. 1040ez forms download free You are permitted to take a distribution from your HSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. 1040ez forms download free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). 1040ez forms download free Earnings on amounts in an HSA are not included in your income while held in the HSA. 1040ez forms download free Death of HSA Holder You should choose a beneficiary when you set up your HSA. 1040ez forms download free What happens to that HSA when you die depends on whom you designate as the beneficiary. 1040ez forms download free Spouse is the designated beneficiary. 1040ez forms download free   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. 1040ez forms download free Spouse is not the designated beneficiary. 1040ez forms download free   If your spouse is not the designated beneficiary of your HSA: The account stops being an HSA, and The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die. 1040ez forms download free If your estate is the beneficiary, the value is included on your final income tax return. 1040ez forms download free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. 1040ez forms download free Filing Form 8889 You must file Form 8889 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your HSA during the year. 1040ez forms download free You must file the form even if only your employer or your spouse's employer made contributions to the HSA. 1040ez forms download free If, during the tax year, you are the beneficiary of two or more HSAs or you are a beneficiary of an HSA and you have your own HSA, you must complete a separate Form 8889 for each HSA. 1040ez forms download free Enter “statement” at the top of each Form 8889 and complete the form as instructed. 1040ez forms download free Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. 1040ez forms download free Attach the statements to your tax return after the controlling Form 8889. 1040ez forms download free Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. 1040ez forms download free Unlike the previous discussions, “you” refers to the employer and not to the employee. 1040ez forms download free Health plan. 1040ez forms download free   If you want your employees to be able to have an HSA, they must have an HDHP. 1040ez forms download free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . 1040ez forms download free Contributions. 1040ez forms download free   You can make contributions to your employees' HSAs. 1040ez forms download free You deduct the contributions on your business income tax return for the year in which you make the contributions. 1040ez forms download free If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. 1040ez forms download free   For more information on employer contributions, see Notice 2008-59, 2008-29 I. 1040ez forms download free R. 1040ez forms download free B. 1040ez forms download free 123, questions 23 through 27, available at www. 1040ez forms download free irs. 1040ez forms download free gov/irb/2008-29_IRB/ar11. 1040ez forms download free html. 1040ez forms download free Comparable contributions. 1040ez forms download free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. 1040ez forms download free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. 1040ez forms download free The comparability rules do not apply to contributions made through a cafeteria plan. 1040ez forms download free Comparable participating employees. 1040ez forms download free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an HSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (part-time, full-time, or former employees). 1040ez forms download free   To meet the comparability requirements for eligible employees who have not established an HSA by December 31 or have not notified you that they have an HSA, you must meet a notice requirement and a contribution requirement. 1040ez forms download free   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. 1040ez forms download free The notice must state that each eligible employee who, by the last day of February, establishes an HSA and notifies you that they have established an HSA will receive a comparable contribution to the HSA for the prior year. 1040ez forms download free For a sample of the notice, see Regulation 54. 1040ez forms download free 4980G-4 A-14(c). 1040ez forms download free You will meet the contribution requirement for these employees if by April 15, 2014, you contribute comparable amounts plus reasonable interest to the employee's HSA for the prior year. 1040ez forms download free Note. 1040ez forms download free For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. 1040ez forms download free Excise tax. 1040ez forms download free   If you made contributions to your employees' HSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. 1040ez forms download free Employment taxes. 1040ez forms download free   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. 1040ez forms download free You must report the contributions in box 12 of the Form W-2 you file for each employee. 1040ez forms download free This includes the amounts the employee elected to contribute through a cafeteria plan. 1040ez forms download free Enter code “W” in box 12. 1040ez forms download free Medical Savings Accounts (MSAs) Archer MSAs were created to help self-employed individuals and employees of certain small employers meet the medical care costs of the account holder, the account holder's spouse, or the account holder's dependent(s). 1040ez forms download free After December 31, 2007, you cannot be treated as an eligible individual for Archer MSA purposes unless: You were an active participant for any tax year ending before January 1, 2008, or You became an active participant for a tax year ending after December 31, 2007, by reason of coverage under a high deductible health plan (HDHP) of an Archer MSA participating employer. 1040ez forms download free A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder who is eligible for Medicare. 1040ez forms download free Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. 1040ez forms download free S. 1040ez forms download free financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. 1040ez forms download free What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. 1040ez forms download free You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. 1040ez forms download free The interest or other earnings on the assets in your Archer MSA are tax free. 1040ez forms download free Distributions may be tax free if you pay qualified medical expenses. 1040ez forms download free See Qualified medical expenses , later. 1040ez forms download free The contributions remain in your Archer MSA from year to year until you use them. 1040ez forms download free An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. 1040ez forms download free Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. 1040ez forms download free An employee (or the spouse of an employee) of a small employer (defined later) that maintains a self-only or family HDHP for you (or your spouse). 1040ez forms download free A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. 1040ez forms download free You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. 1040ez forms download free You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. 1040ez forms download free If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. 1040ez forms download free This is true even if the other person does not actually claim your exemption. 1040ez forms download free Small employer. 1040ez forms download free   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. 1040ez forms download free The definition of small employer is modified for new employers and growing employers. 1040ez forms download free Growing employer. 1040ez forms download free   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. 1040ez forms download free The employer will continue to meet the requirement for small employers if he or she: Had 50 or fewer employees when the Archer MSAs began, Made a contribution that was excludable or deductible as an Archer MSA for the last year he or she had 50 or fewer employees, and Had an average of 200 or fewer employees each year after 1996. 1040ez forms download free Changing employers. 1040ez forms download free   If you change employers, your Archer MSA moves with you. 1040ez forms download free However, you may not make additional contributions unless you are otherwise eligible. 1040ez forms download free High deductible health plan (HDHP). 1040ez forms download free   To be eligible for an Archer MSA, you must be covered under an HDHP. 1040ez forms download free An HDHP has: A higher annual deductible than typical health plans, and A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses. 1040ez forms download free Limits. 1040ez forms download free   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. 1040ez forms download free   Self-only coverage Family coverage Minimum annual deductible $2,150 $4,300 Maximum annual deductible $3,200 $6,450 Maximum annual out-of-pocket expenses $4,300 $7,850 Family plans that do not meet the high deductible rules. 1040ez forms download free   There are some family plans that have deductibles for both the family as a whole and for individual family members. 1040ez forms download free Under these plans, if you meet the individual deductible for one family member, you do not have to meet the higher annual deductible amount for the family. 1040ez forms download free If either the deductible for the family as a whole or the deductible for an individual family member is less than the minimum annual deductible for family coverage, the plan does not qualify as an HDHP. 1040ez forms download free Example. 1040ez forms download free You have family health insurance coverage in 2013. 1040ez forms download free The annual deductible for the family plan is $5,500. 1040ez forms download free This plan also has an individual deductible of $2,000 for each family member. 1040ez forms download free The plan does not qualify as an HDHP because the deductible for an individual family member is less than the minimum annual deductible ($4,300) for family coverage. 1040ez forms download free Other health coverage. 1040ez forms download free   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. 1040ez forms download free However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. 1040ez forms download free However, you can have additional insurance that provides benefits only for the following items. 1040ez forms download free Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. 1040ez forms download free A specific disease or illness. 1040ez forms download free A fixed amount per day (or other period) of hospitalization. 1040ez forms download free You can also have coverage (whether provided through insurance or otherwise) for the following items. 1040ez forms download free Accidents. 1040ez forms download free Disability. 1040ez forms download free Dental care. 1040ez forms download free Vision care. 1040ez forms download free Long-term care. 1040ez forms download free Contributions to an MSA Contributions to an Archer MSA must be made in cash. 1040ez forms download free You cannot contribute stock or other property to an Archer MSA. 1040ez forms download free Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. 1040ez forms download free (You do not pay tax on these contributions. 1040ez forms download free ) If your employer does not make contributions to your Archer MSA, or you are self-employed, you can make your own contributions to your Archer MSA. 1040ez forms download free Both you and your employer cannot make contributions to your Archer MSA in the same year. 1040ez forms download free You do not have to make contributions to your Archer MSA every year. 1040ez forms download free    If your spouse is covered by your HDHP and an excludable amount is contributed by your spouse's employer to an Archer MSA belonging to your spouse, you cannot make contributions to your own Archer MSA that year. 1040ez forms download free Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. 1040ez forms download free An income limit. 1040ez forms download free Annual deductible limit. 1040ez forms download free   You (or your employer) can contribute up to 75% of the annual deductible of your HDHP (65% if you have a self-only plan) to your Archer MSA. 1040ez forms download free You must have the HDHP all year to contribute the full amount. 1040ez forms download free If you do not qualify to contribute the full amount for the year, determine your annual deductible limit by using the worksheet in the Instructions for Form 8853, Archer MSAs and Long-Term Care Insurance Contracts. 1040ez forms download free Example 1. 1040ez forms download free You have an HDHP for your family all year in 2013. 1040ez forms download free The annual deductible is $5,000. 1040ez forms download free You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. 1040ez forms download free Example 2. 1040ez forms download free You have an HDHP for your family for the entire months of July through December 2013 (6 months). 1040ez forms download free The annual deductible is $5,000. 1040ez forms download free You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. 1040ez forms download free If you and your spouse each have a family plan, you are treated as having family coverage with the lower annual deductible of the two health plans. 1040ez forms download free The contribution limit is split equally between you unless you agree on a different division. 1040ez forms download free Income limit. 1040ez forms download free   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. 1040ez forms download free   If you are self-employed, you cannot contribute more than your net self-employment income. 1040ez forms download free This is your income from self-employment minus expenses (including the deductible part of self-employment tax). 1040ez forms download free Example 1. 1040ez forms download free Noah Paul earned $25,000 from ABC Company in 2013. 1040ez forms download free Through ABC, he had an HDHP for his family for the entire year. 1040ez forms download free The annual deductible was $5,000. 1040ez forms download free He can contribute up to $3,750 to his Archer MSA (75% × $5,000). 1040ez forms download free He can contribute the full amount because he earned more than $3,750 at ABC. 1040ez forms download free Example 2. 1040ez forms download free Westley Lawrence is self-employed. 1040ez forms download free He had an HDHP for his family for the entire year in 2013. 1040ez forms download free The annual deductible was $5,000. 1040ez forms download free Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). 1040ez forms download free However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. 1040ez forms download free Therefore, he is limited to a contribution of $2,500. 1040ez forms download free Individuals enrolled in Medicare. 1040ez forms download free   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. 1040ez forms download free However, you may be eligible for a Medicare Advantage MSA, discussed later. 1040ez forms download free When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. 1040ez forms download free Reporting Contributions on Your Return Report all contributions to your Archer MSA on Form 8853 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. 1040ez forms download free You should receive Form 5498-SA, HSA, Archer MSA, or Medicare Advantage MSA Information, from the trustee showing the amount you (or your employer) contributed during the year. 1040ez forms download free Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. 1040ez forms download free Follow the instructions for Form 8853 and complete the worksheet in the instructions. 1040ez forms download free Report your Archer MSA deduction on Form 1040 or Form 1040NR. 1040ez forms download free Excess contributions. 1040ez forms download free   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. 1040ez forms download free Excess contributions are not deductible. 1040ez forms download free Excess contributions made by your employer are included in your gross income. 1040ez forms download free If the excess contribution is not included in box 1 of Form W-2, you must report the excess as “Other income” on your tax return. 1040ez forms download free   Generally, you must pay a 6% excise tax on excess contributions. 1040ez forms download free See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. 1040ez forms download free The excise tax applies to each tax year the excess contribution remains in the account. 1040ez forms download free   You may withdraw some or all of the excess contributions and not pay the excise tax on the amount withdrawn if you meet the following conditions. 1040ez forms download free You withdraw the excess contributions by the due date, including extensions, of your tax return. 1040ez forms download free You withdraw any income earned on the withdrawn contributions and include the earnings in “Other income” on your tax return for the year you withdraw the contributions and earnings. 1040ez forms download free Deducting an excess contribution in a later year. 1040ez forms download free   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. 1040ez forms download free The excess contribution you can deduct in the current year is the lesser of the following two amounts. 1040ez forms download free Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. 1040ez forms download free The total excess contributions in your Archer MSA at the beginning of the year. 1040ez forms download free   Any excess contributions remaining at the end of a tax year are subject to the excise tax. 1040ez forms download free See Form 5329. 1040ez forms download free Distributions From an MSA You will generally pay medical expenses during the year without being reimbursed by your HDHP until you reach the annual deductible for the plan. 1040ez forms download free When you pay medical expenses during the year that are not reimbursed by your HDHP, you can ask the trustee of your Archer MSA to send you a distribution from your Archer MSA. 1040ez forms download free You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). 1040ez forms download free If you receive distributions for other reasons, the amount will be subject to income tax and may be subject to an additional 20% tax as well. 1040ez forms download free You do not have to make withdrawals from your Archer MSA each year. 1040ez forms download free If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. 1040ez forms download free A distribution is money you get from your Archer MSA. 1040ez forms download free The trustee will report any distribution to you and the IRS on Form 1099-SA, Distributions From an HSA, Archer MSA, or Medicare Advantage MSA. 1040ez forms download free Qualified medical expenses. 1040ez forms download free   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. 1040ez forms download free These are explained in Publication 502. 1040ez forms download free   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. 1040ez forms download free A medicine or drug will be a qualified medical expense for MSA purposes only if the medicine or drug: Requires a prescription, Is available without a prescription (an over-the-counter medicine or drug) and you get a prescription for it, or Is insulin. 1040ez forms download free   Qualified medical expenses are those incurred by the following persons. 1040ez forms download free You and your spouse. 1040ez forms download free All dependents you claim on your tax return. 1040ez forms download free Any person you could have claimed as a dependent on your return except that: The person filed a joint return, The person had gross income of $3,900 or more, or You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2013 return. 1040ez forms download free    For this purpose, a child of parents that are divorced, separated, or living apart for the last 6 months of the calendar year is treated as the dependent of both parents whether or not the custodial parent releases the claim to the child's exemption. 1040ez forms download free    You cannot deduct qualified medical expenses as an itemized deduction on Schedule A (Form 1040) that are equal to the tax-free distribution from your Archer MSA. 1040ez forms download free Special rules for insurance premiums. 1040ez forms download free   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. 1040ez forms download free You can, however, treat premiums for long-term care coverage, health care coverage while you receive unemployment benefits, or health care continuation coverage required under any federal law as qualified medical expenses for Archer MSAs. 1040ez forms download free Health coverage tax credit. 1040ez forms download free   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. 1040ez forms download free See Publication 502 for information on this credit. 1040ez forms download free Deemed distributions from Archer MSAs. 1040ez forms download free   The following situations result in deemed taxable distributions from your Archer MSA. 1040ez forms download free You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. 1040ez forms download free Your account ceases to be an Archer MSA as of January 1, 2013, and you must include the fair market value of all assets in the account as of January 1, 2013, on Form 8853. 1040ez forms download free You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. 1040ez forms download free You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. 1040ez forms download free   Examples of prohibited transactions include the direct or indirect: Sale, exchange, or leasing of property between you and the Archer MSA, Lending of money between you and the Archer MSA, Furnishing goods, services, or facilities between you and the Archer MSA, and Transfer to or use by you, or for your benefit, of any assets of the Archer MSA. 1040ez forms download free   Any deemed distribution will not be treated as used to pay qualified medical expenses. 1040ez forms download free These distributions are included in your income and are subject to the additional 20% tax, discussed later. 1040ez forms download free Recordkeeping. 1040ez forms download free You must keep records sufficient to show that: The distributions were exclusively to pay or reimburse qualified medical expenses, The qualified medical expenses had not been previously paid or reimbursed from another source, and The medical expenses had not been taken as an itemized deduction in any year. 1040ez forms download free Do not send these records with your tax return. 1040ez forms download free Keep them with your tax records. 1040ez forms download free Reporting Distributions on Your Return How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier). 1040ez forms download free If you use a distribution from your Archer MSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8853. 1040ez forms download free Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. 1040ez forms download free If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. 1040ez forms download free Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free You may have to pay an additional 20% tax, discussed later, on your taxable distribution. 1040ez forms download free If an amount (other than a rollover) is contributed to your Archer MSA this year (by you or your employer), you also must report and pay tax on a distribution you receive from your Archer MSA this year that is used to pay medical expenses of someone who is not covered by an HDHP, or is also covered by another health plan that is not an HDHP, at the time the expenses are incurred. 1040ez forms download free Rollovers. 1040ez forms download free   Generally, any distribution from an Archer MSA that you roll over into another Archer MSA or an HSA is not taxable if you complete the rollover within 60 days. 1040ez forms download free An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. 1040ez forms download free See the Form 8853 instructions for more information. 1040ez forms download free Additional tax. 1040ez forms download free   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. 1040ez forms download free Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. 1040ez forms download free Report the additional tax in the total on Form 1040 or Form 1040NR. 1040ez forms download free Exceptions. 1040ez forms download free   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. 1040ez forms download free Balance in an Archer MSA An Archer MSA is generally exempt from tax. 1040ez forms download free You are permitted to take a distribution from your Archer MSA at any time; however, only those amounts used exclusively to pay for qualified medical expenses are tax free. 1040ez forms download free Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). 1040ez forms download free Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. 1040ez forms download free Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. 1040ez forms download free What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. 1040ez forms download free Spouse is the designated beneficiary. 1040ez forms download free   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. 1040ez forms download free Spouse is not the designated beneficiary. 1040ez forms download free   If your spouse is not the designated beneficiary of your Archer MSA: The account stops being an Archer MSA, and The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die. 1040ez forms download free   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. 1040ez forms download free The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death. 1040ez forms download free Filing Form 8853 You must file Form 8853 with your Form 1040 or Form 1040NR if you (or your spouse, if married filing a joint return) had any activity in your Archer MSA during the year. 1040ez forms download free You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. 1040ez forms download free If, during the tax year, you are the beneficiary of two or more Archer MSAs or you are a beneficiary of an Archer MSA and you have your own Archer MSA, you must complete a separate Form 8853 for each MSA. 1040ez forms download free Enter “statement” at the top of each Form 8853 and complete the form as instructed. 1040ez forms download free Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. 1040ez forms download free Attach the statements to your tax return after the controlling Form 8853. 1040ez forms download free Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. 1040ez forms download free Unlike the previous discussions, “you” refers to the employer and not to the employee. 1040ez forms download free Health plan. 1040ez forms download free   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. 1040ez forms download free You can provide no additional coverage other than those exceptions listed previously under Other health coverage . 1040ez forms download free Contributions. 1040ez forms download free   You can make contributions to your employees' Archer MSAs. 1040ez forms download free You deduct the contributions on the “Employee benefit programs” line of your business income tax return for the year in which you make the contributions. 1040ez forms download free If you are filing Form 1040, Schedule C, this is Part II, line 14. 1040ez forms download free Comparable contributions. 1040ez forms download free   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. 1040ez forms download free Your contributions are comparable if they are either: The same amount, or The same percentage of the annual deductible limit under the HDHP covering the employees. 1040ez forms download free Comparable participating employees. 1040ez forms download free   Comparable participating employees: Are covered by your HDHP and are eligible to establish an Archer MSA, Have the same category of coverage (either self-only or family coverage), and Have the same category of employment (either part-time or full-time). 1040ez forms download free Excise tax. 1040ez forms download free   If you made contributions to your employees' Archer MSAs that were not comparable, you must pay an excise tax of 35% of the amount you contributed. 1040ez forms download free Employment taxes. 1040ez forms download free   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. 1040ez forms download free You must report the contributions in box 12 of the Form W-2 you file for each employee. 1040ez forms download free Enter code “R” in box 12. 1040ez forms download free Medicare Advantage MSAs A Medicare Advantage MSA is an Archer MSA designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. 1040ez forms download free To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare and have a high deductible health plan (HDHP) that meets the Medicare guidelines. 1040ez forms download free A Medicare Advantage MSA is a tax-exempt trust or custodial savings account that you set up with a financial institution (such as a bank or an insurance company) in which the Medicare program can deposit money for qualified medical expenses. 1040ez forms download free The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. 1040ez forms download free An HDHP is a special health insurance policy that has a high deductible. 1040ez forms download free You choose the policy you want to use as part of your Medicare Advantage MSA plan. 1040ez forms download free However, the policy must be approved by the Medicare program. 1040ez forms download free Medicare Advantage MSAs are administered through the federal Medicare program. 1040ez forms download free You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. 1040ez forms download free medicare. 1040ez forms download free gov. 1040ez forms download free Note. 1040ez forms download free You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. 1040ez forms download free Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. 1040ez forms download free FSAs are usually funded through voluntary salary reduction agreements with your employer. 1040ez forms download free No employment or federal income taxes are deducted from your contribution. 1040ez forms download free The employer may also contribute. 1040ez forms download free Note. 1040ez forms download free Unlike HSAs or Archer MSAs which must be reported on Form 1040 or Form 1040NR, there are no reporting requirements for FSAs on your income tax return. 1040ez forms download free For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. 1040ez forms download free What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. 1040ez forms download free Contributions made by your employer can be excluded from your gross income. 1040ez forms download free No employment or federal income taxes are deducted from the contributions. 1040ez forms download free Withdrawals may be tax free if you pay qualified medical expenses. 1040ez forms download free See Qualified medical expenses , later. 1040ez forms download free You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. 1040ez forms download free Qualifying for an FSA Health FSAs are employer-established benefit plans. 1040ez forms download free These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. 1040ez forms download free Employers have complete flexibility to offer various combinations of benefits in designing their plan. 1040ez forms download free You do not have to be covered under any other health care plan to participate. 1040ez forms download free Self-employed persons are not eligible for an FSA. 1040ez forms download free Certain limitations may apply if you are a highly compensated participant or a key employee. 1040ez forms download free Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. 1040ez forms download free This is sometimes called a salary reduction agreement. 1040ez forms download free The employer may also contribute to your FSA if specified in the plan. 1040ez forms download free You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. 1040ez forms download free However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. 1040ez forms download free When To Contribute At the