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Amended Tax Form 1040x

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Amended Tax Form 1040x

Amended tax form 1040x 5. Amended tax form 1040x   Manufacturers Taxes Table of Contents Importer. Amended tax form 1040x Use considered sale. Amended tax form 1040x Lease considered sale. Amended tax form 1040x Bonus goods. Amended tax form 1040x Taxable Event ExemptionsRequirements for Exempt Sales Credits or Refunds Sport Fishing EquipmentRelated person. Amended tax form 1040x Bows, Quivers, Broadheads, and Points Arrow ShaftsExemption for certain wooden arrows. Amended tax form 1040x CoalExported. Amended tax form 1040x Taxable TiresQualifying intercity or local bus. Amended tax form 1040x Qualifying school bus. Amended tax form 1040x Gas Guzzler TaxVehicles not subject to tax. Amended tax form 1040x Imported automobiles. Amended tax form 1040x VaccinesConditions to allowance. Amended tax form 1040x Taxable Medical Devices The following discussion of manufacturers taxes applies to the tax on: Sport fishing equipment; Fishing rods and fishing poles; Electric outboard motors; Fishing tackle boxes; Bows, quivers, broadheads, and points; Arrow shafts; Coal; Taxable tires; Gas guzzler automobiles; and Vaccines. Amended tax form 1040x Manufacturer. Amended tax form 1040x   The term “manufacturer” includes a producer or importer. Amended tax form 1040x A manufacturer is any person who produces a taxable article from new or raw material, or from scrap, salvage, or junk material, by processing or changing the form of an article or by combining or assembling two or more articles. Amended tax form 1040x If you furnish the materials and keep title to those materials and to the finished article, you are considered the manufacturer even though another person actually manufactures the taxable article. Amended tax form 1040x   A manufacturer who sells a taxable article in knockdown (unassembled) condition is liable for the tax. Amended tax form 1040x The person who buys these component parts and assembles a taxable article may also be liable for tax as a further manufacturer depending on the labor, material, and overhead required to assemble the completed article if the article is assembled for business use. Amended tax form 1040x Importer. Amended tax form 1040x   An importer is a person who brings a taxable article into the United States, or withdraws a taxable article from a customs bonded warehouse for sale or use in the United States. Amended tax form 1040x Sale. Amended tax form 1040x   A sale is the transfer of the title to, or the substantial incidents of ownership in, an article to a buyer for consideration that may consist of money, services, or other things. Amended tax form 1040x Use considered sale. Amended tax form 1040x   A manufacturer who uses a taxable article is liable for the tax in the same manner as if it were sold. Amended tax form 1040x Lease considered sale. Amended tax form 1040x   The lease of an article (including any renewal or extension of the lease) by the manufacturer is generally considered a taxable sale. Amended tax form 1040x However, for the gas guzzler tax, only the first lease (excluding any renewal or extension) of the automobile by the manufacturer is considered a sale. Amended tax form 1040x Manufacturers taxes based on sale price. Amended tax form 1040x   The manufacturers taxes imposed on the sale of sport fishing equipment, electric outboard motors, and bows are based on the sale price of the article. Amended tax form 1040x The taxes imposed on coal are based either on the sale price or the weight. Amended tax form 1040x   The price for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. Amended tax form 1040x However, you include certain charges made when a taxable article is sold and you exclude others. Amended tax form 1040x To figure the price on which you base the tax, use the following rules. Amended tax form 1040x Include both the following charges in the price. Amended tax form 1040x Any charge for coverings or containers (regardless of their nature). Amended tax form 1040x Any charge incident to placing the article in a condition packed ready for shipment. Amended tax form 1040x Exclude all the following amounts from the price. Amended tax form 1040x The manufacturers excise tax, whether or not it is stated as a separate charge. Amended tax form 1040x The transportation charges pursuant to the sale. Amended tax form 1040x The cost of transportation of goods to a warehouse before their bona fide sale is not excludable. Amended tax form 1040x Delivery, insurance, installation, retail dealer preparation charges, and other charges you incur in placing the article in the hands of the purchaser under a bona fide sale. Amended tax form 1040x Discounts, rebates, and similar allowances actually granted to the purchaser. Amended tax form 1040x Local advertising charges. Amended tax form 1040x A charge made separately when the article is sold and that qualifies as a charge for “local advertising” may, within certain limits, be excluded from the sale price. Amended tax form 1040x Charges for warranty paid at the purchaser's option. Amended tax form 1040x However, a charge for a warranty of an article that the manufacturer requires the purchaser to pay to obtain the article is included in the sale price on which the tax is figured. Amended tax form 1040x Bonus goods. Amended tax form 1040x   Allocate the sale price if you give free nontaxable goods with the purchase of taxable merchandise. Amended tax form 1040x Figure the tax only on the sale price attributable to the taxable articles. Amended tax form 1040x Example. Amended tax form 1040x A manufacturer sells a quantity of taxable articles and gives the purchaser certain nontaxable articles as a bonus. Amended tax form 1040x The sale price of the shipment is $1,500. Amended tax form 1040x The normal sale price is $2,000: $1,500 for the taxable articles and $500 for the nontaxable articles. Amended tax form 1040x Since the taxable items represent 75% of the normal sale price, the tax is based on 75% of the actual sale price, or $1,125 (75% of $1,500). Amended tax form 1040x The remaining $375 is allocated to the nontaxable articles. Amended tax form 1040x Taxable Event Tax attaches when the title to the article sold passes from the manufacturer to the buyer. Amended tax form 1040x When the title passes depends on the intention of the parties as gathered from the contract of sale. Amended tax form 1040x In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale occurs determine when title passes. Amended tax form 1040x If the taxable article is used by the manufacturer, the tax attaches at the time use begins. Amended tax form 1040x The manufacturer is liable for the tax. Amended tax form 1040x Partial payments. Amended tax form 1040x   The tax applies to each partial payment received when taxable articles are: Leased, Sold conditionally, Sold on installment with chattel mortgage, or Sold on installment with title to pass in the future. Amended tax form 1040x To figure the tax, multiply the partial payment by the tax rate in effect at the time of the payment. Amended tax form 1040x Exemptions The following sales by the manufacturer are exempt from the manufacturers tax. Amended tax form 1040x Sale of an article to a state or local government for the exclusive use of the state or local government. Amended tax form 1040x This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. Amended tax form 1040x State is defined in Definitions in chapter 1. Amended tax form 1040x Sale of an article to a nonprofit educational organization for its exclusive use. Amended tax form 1040x This exemption does not apply to the taxes on coal, gas guzzlers, and vaccines. Amended tax form 1040x Nonprofit educational organization is defined under Communications Tax in chapter 4. Amended tax form 1040x Sale of an article to a qualified blood collector organization. Amended tax form 1040x This exemption does not apply to gas guzzlers, recreational equipment, and vaccines. Amended tax form 1040x Qualified blood collector organizations are defined under Communications Tax in chapter 4. Amended tax form 1040x Sale of an article for use by the purchaser as supplies for vessels. Amended tax form 1040x This exemption does not apply to the taxes on coal and vaccines. Amended tax form 1040x Supplies for vessels means ships' stores, sea stores, or legitimate equipment on vessels of war of the United States or any foreign nation, vessels employed in the fisheries or whaling business, or vessels actually engaged in foreign trade. Amended tax form 1040x Sale of an article for use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by the second purchaser for further manufacture. Amended tax form 1040x This exemption does not apply to the tax on coal and tires. Amended tax form 1040x Use for further manufacture means use in the manufacture or production of an article subject to the manufacturers excise taxes. Amended tax form 1040x If you buy articles tax free and resell or use them other than in the manufacture of another article, you are liable for the tax on their resale or use just as if you had manufactured and sold them. Amended tax form 1040x Sale of an article for export or for resale by the purchaser to a second purchaser for export. Amended tax form 1040x The article may be exported to a foreign country or to a possession of the United States. Amended tax form 1040x A vaccine shipped to a possession of the United States is not considered to be exported. Amended tax form 1040x If an article is sold tax free for export and the manufacturer does not receive proof of export, described later, the manufacturer is liable for the tax. Amended tax form 1040x Sales of articles of native Indian handicraft, such as bows and arrow shafts, manufactured by Indians on reservations, in Indian schools, or under U. Amended tax form 1040x S. Amended tax form 1040x jurisdiction in Alaska. Amended tax form 1040x For tire exemptions, see section 4221(e)(2). Amended tax form 1040x Requirements for Exempt Sales The following requirements must be met for a sale to be exempt from the manufacturers tax. Amended tax form 1040x Registration requirements. Amended tax form 1040x   The manufacturer, first purchaser, and second purchaser in the case of resales must be registered. Amended tax form 1040x See the Form 637 instructions for more information. Amended tax form 1040x Exceptions to registration requirements. Amended tax form 1040x   Registration is not required for: State or local governments, Foreign purchasers of articles sold or resold for export, The United States, or Parties to a sale of supplies for vessels and aircraft. Amended tax form 1040x Certification requirement. Amended tax form 1040x   If the purchaser is required to be registered, the purchaser must give the manufacturer its registration number and certify the exempt purpose for which the article will be used. Amended tax form 1040x The information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with the sale. Amended tax form 1040x   For a sale to a state or local government, an exemption certificate must be signed by an officer or employee authorized by the state or local government. Amended tax form 1040x See Regulations section 48. Amended tax form 1040x 4221-5(c) for the certificate requirements. Amended tax form 1040x   For sales for use as supplies for vessels and aircraft, if the manufacturer and purchaser are not registered, the owner or agent of the vessel must provide an exemption certificate to the manufacturer before or at the time of sale. Amended tax form 1040x See Regulations section 48. Amended tax form 1040x 4221-4(d) for the certificate requirements. Amended tax form 1040x Proof of export requirement. Amended tax form 1040x   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof of exportation. Amended tax form 1040x See Regulations section 48. Amended tax form 1040x 4221-3(d) for evidence that qualifies as proof of exportation. Amended tax form 1040x Proof of resale for further manufacture requirement. Amended tax form 1040x   Within 6 months of the date of sale or shipment by the manufacturer, whichever is earlier, the manufacturer must receive proof that the article has been resold for use in further manufacture. Amended tax form 1040x See Regulations section 48. Amended tax form 1040x 4221-2(c) for evidence that qualifies as proof of resale. Amended tax form 1040x Information to be furnished to purchaser. Amended tax form 1040x   The manufacturer must indicate to the purchaser that the articles normally would be subject to tax and are being sold tax free for an exempt purpose because the purchaser has provided the required certificate. Amended tax form 1040x Credits or Refunds The manufacturer may be eligible to obtain a credit or refund of the manufacturers tax for certain uses, sales, exports, and price readjustments. Amended tax form 1040x The claim must set forth in detail the facts upon which the claim is based. Amended tax form 1040x Uses, sales, and exports. Amended tax form 1040x   A credit or refund (without interest) of the manufacturers taxes may be allowable if a tax-paid article is, by any person: Exported, Used or sold for use as supplies for vessels (except for coal and vaccines), Sold to a state or local government for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a nonprofit educational organization for its exclusive use (except for coal, gas guzzlers, and vaccines), Sold to a qualified blood collector organization for its exclusive use (except for gas guzzlers, recreational equipment, and vaccines), or Used for further manufacture of another article subject to the manufacturers taxes (except for coal). Amended tax form 1040x Export. Amended tax form 1040x   If a tax-paid article is exported, the exporter or shipper may claim a credit or refund if the manufacturer waives its right to claim the credit or refund. Amended tax form 1040x In the case of a tax-paid article used to make another taxable article, the subsequent manufacturer may claim the credit or refund. Amended tax form 1040x Price readjustments. Amended tax form 1040x   In addition, a credit or refund (without interest) may be allowable for a tax-paid article for which the price is readjusted by reason of return or repossession of the article or a bona fide discount, rebate, or allowance for taxes based on price. Amended tax form 1040x Conditions to allowance. Amended tax form 1040x   To claim a credit or refund in the case of export; supplies for vessels; or sales to a state or local government, nonprofit educational organization, or qualified blood collector organization; the person who paid the tax must certify on the claim that one of the following applies and that the claimant has the required supporting information. Amended tax form 1040x The claimant sold the article at a tax-excluded price. Amended tax form 1040x The person has repaid, or agreed to repay, the tax to the ultimate vendor of the article. Amended tax form 1040x The person has obtained the written consent of the ultimate vendor to make the claim. Amended tax form 1040x The ultimate vendor generally is the seller making the sale that gives rise to the overpayment of tax. Amended tax form 1040x Claim for further manufacture. Amended tax form 1040x   To claim a credit or refund for further manufacture, the claimant must include a statement that contains the following. Amended tax form 1040x The name and address of the manufacturer and the date of payment. Amended tax form 1040x An identification of the article for which the credit or refund is claimed. Amended tax form 1040x The amount of tax paid on the article and the date on which it was paid. Amended tax form 1040x Information indicating that the article was used as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the manufacturer, or was sold on or in connection with, or with the sale of a second article manufactured or produced by the manufacturer. Amended tax form 1040x An identification of the second article. Amended tax form 1040x   For claims by the exporter or shipper, the claim must contain the proof of export and a statement signed by the person that paid the tax waiving the right to claim a credit or refund. Amended tax form 1040x The statement must include the amount of tax paid, the date of payment, and the office to which it was paid. Amended tax form 1040x Claim for price readjustment. Amended tax form 1040x   To claim a credit or refund for a price readjustment, the person who paid the tax must include with the claim, a statement that contains the following. Amended tax form 1040x A description of the circumstances that gave rise to the price readjustment. Amended tax form 1040x An identification of the article whose price was readjusted. Amended tax form 1040x The price at which the article was sold. Amended tax form 1040x The amount of tax paid on the article and the date on which it was paid. Amended tax form 1040x The name and address of the purchaser. Amended tax form 1040x The amount repaid to the purchaser or credited to the purchaser's account. Amended tax form 1040x Sport Fishing Equipment A tax of 10% of the sale price is imposed on many articles of sport fishing equipment sold by the manufacturer. Amended tax form 1040x This includes any parts or accessories sold on or in connection with the sale of those articles. Amended tax form 1040x Pay this tax with Form 720. Amended tax form 1040x No tax deposits are required. Amended tax form 1040x Sport fishing equipment includes all the following items. Amended tax form 1040x Fishing rods and poles (and component parts), fishing reels, fly fishing lines, and other fishing lines not over 130 pounds test, fishing spears, spear guns, and spear tips. Amended tax form 1040x Items of terminal tackle, including leaders, artificial lures, artificial baits, artificial flies, fishing hooks, bobbers, sinkers, snaps, drayles, and swivels (but not including natural bait or any item of terminal tackle designed for use and ordinarily used on fishing lines not described in (1)). Amended tax form 1040x The following items of fishing supplies and accessories: fish stringers, creels, bags, baskets, and other containers designed to hold fish, portable bait containers, fishing vests, landing nets, gaff hooks, fishing hook disgorgers, and dressing for fishing lines and artificial flies. Amended tax form 1040x Fishing tip-ups and tilts. Amended tax form 1040x Fishing rod belts, fishing rodholders, fishing harnesses, fish fighting chairs, fishing outriggers, and fishing downriggers. Amended tax form 1040x See Revenue Ruling 88-52 in Cumulative Bulletin 1988-1 for a more complete description of the items of taxable equipment. Amended tax form 1040x Fishing rods and fishing poles. Amended tax form 1040x   The tax on fishing rods and fishing poles (and component parts) is 10% of the sales price not to exceed $10 per article. Amended tax form 1040x The tax is paid by the manufacturer, producer, or importer. Amended tax form 1040x Fishing tackle boxes. Amended tax form 1040x   The tax on fishing tackle boxes is 3% of the sales price. Amended tax form 1040x The tax is paid by the manufacturer, producer, or importer. Amended tax form 1040x Electric outboard boat motors. Amended tax form 1040x   A tax of 3% of the sale price is imposed on the sale by the manufacturer of electric outboard motors. Amended tax form 1040x This includes any parts or accessories sold on or in connection with the sale of those articles. Amended tax form 1040x Certain equipment resale. Amended tax form 1040x   The tax on the sale of sport fishing equipment is imposed a second time under the following circumstances. Amended tax form 1040x If the manufacturer sells a taxable article to any person, the manufacturer is liable for the tax. Amended tax form 1040x If the purchaser or any other person then sells it to a person who is related (discussed next) to the manufacturer, that related person is liable for a second tax on any subsequent sale of the article. Amended tax form 1040x The second tax, however, is not imposed if the constructive sale price rules under section 4216(b) apply to the sale by the manufacturer. Amended tax form 1040x   If the second tax is imposed, a credit for tax previously paid by the manufacturer is available provided the related person can document the tax paid. Amended tax form 1040x The documentation requirement is generally satisfied only through submission of copies of actual records of the person that previously paid the tax. Amended tax form 1040x Related person. Amended tax form 1040x   For the tax on sport fishing equipment, a person is a related person of the manufacturer if that person and the manufacturer have a relationship described in section 465(b)(3)(C). Amended tax form 1040x Bows, Quivers, Broadheads, and Points The tax on bows is 11% (. Amended tax form 1040x 11) of the sales price. Amended tax form 1040x The tax is paid by the manufacturer, producer, or importer. Amended tax form 1040x It applies to bows having a peak draw weight of 30 pounds or more. Amended tax form 1040x The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. Amended tax form 1040x Pay this tax with Form 720. Amended tax form 1040x No tax deposits are required. Amended tax form 1040x Arrow Shafts The tax on arrow shafts is listed on Form 720. Amended tax form 1040x The tax is paid by the manufacturer, producer, or importer of any arrow shaft (whether sold separately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow that after its assembly meets either of the following conditions. Amended tax form 1040x It measures 18 inches or more in overall length. Amended tax form 1040x It measures less than 18 inches in overall length but is suitable for use with a taxable bow, described earlier. Amended tax form 1040x Exemption for certain wooden arrows. Amended tax form 1040x   After October 3, 2008, the tax does not apply to any shaft made of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as part of a finished or unfinished product) and used in the manufacture of any arrow that after its assembly meets both of the following conditions. Amended tax form 1040x It measures 5/16 of an inch or less in diameter. Amended tax form 1040x It is not suitable for use with a taxable bow, described earlier. Amended tax form 1040x Pay this tax with Form 720. Amended tax form 1040x No tax deposits are required. Amended tax form 1040x Coal A tax is imposed on the first sale of coal mined in the United States. Amended tax form 1040x The producer of the coal is liable for the tax. Amended tax form 1040x The producer is the person who has vested ownership of the coal under state law immediately after the coal is severed from the ground. Amended tax form 1040x Determine vested ownership without regard to any contractual arrangement for the sale or other disposition of the coal or the payment of any royalties between the producer and third parties. Amended tax form 1040x A producer includes any person who extracts coal from coal waste refuse piles (or from the silt waste product that results from the wet washing of coal). Amended tax form 1040x The tax is not imposed on coal extracted from a riverbed by dredging if it can be shown that the coal has been taxed previously. Amended tax form 1040x Tax rates. Amended tax form 1040x   The tax on underground-mined coal is the lower of: $1. Amended tax form 1040x 10 a ton, or 4. Amended tax form 1040x 4% of the sale price. Amended tax form 1040x   The tax on surface-mined coal is the lower of: 55 cents a ton, or 4. Amended tax form 1040x 4% of the sale price. Amended tax form 1040x   Coal will be taxed at the 4. Amended tax form 1040x 4% rate if the selling price is less than $25 a ton for underground-mined coal and less than $12. Amended tax form 1040x 50 a ton for surface-mined coal. Amended tax form 1040x Apply the tax proportionately if a sale or use includes a portion of a ton. Amended tax form 1040x Example. Amended tax form 1040x If you sell 21,000 pounds (10. Amended tax form 1040x 5 tons) of coal from an underground mine for $525, the price per ton is $50. Amended tax form 1040x The tax is $1. Amended tax form 1040x 10 × 10. Amended tax form 1040x 5 tons ($11. Amended tax form 1040x 55). Amended tax form 1040x Coal production. Amended tax form 1040x   Coal is produced from surface mines if all geological matter (trees, earth, rock) above the coal is removed before the coal is mined. Amended tax form 1040x Treat coal removed by auger and coal reclaimed from coal waste refuse piles as produced from a surface mine. Amended tax form 1040x   Treat coal as produced from an underground mine when the coal is not produced from a surface mine. Amended tax form 1040x In some cases, a single mine may yield coal from both surface mining and underground mining. Amended tax form 1040x Determine if the coal is from a surface mine or an underground mine for each ton of coal produced and not on a mine-by-mine basis. Amended tax form 1040x Determining tonnage or selling price. Amended tax form 1040x   The producer pays the tax on coal at the time of sale or use. Amended tax form 1040x In figuring the selling price for applying the tax, the point of sale is f. Amended tax form 1040x o. Amended tax form 1040x b. Amended tax form 1040x (free on board) mine or f. Amended tax form 1040x o. Amended tax form 1040x b. Amended tax form 1040x cleaning plant if you clean the coal before selling it. Amended tax form 1040x This applies even if you sell the coal for a delivered price. Amended tax form 1040x The f. Amended tax form 1040x o. Amended tax form 1040x b. Amended tax form 1040x mine or f. Amended tax form 1040x o. Amended tax form 1040x b. Amended tax form 1040x cleaning plant is the point at which you figure the number of tons sold for applying the applicable tonnage rate, and the point at which you figure the sale price for applying the 4. Amended tax form 1040x 4% rate. Amended tax form 1040x   The tax applies to the full amount of coal sold. Amended tax form 1040x However, the IRS allows a calculated reduction of the taxable weight of the coal for the weight of the moisture in excess of the coal's inherent moisture content. Amended tax form 1040x Include in the sale price any additional charge for a freeze-conditioning additive in figuring the tax. Amended tax form 1040x   Do not include in the sales price the excise tax imposed on coal. Amended tax form 1040x Coal used by the producer. Amended tax form 1040x   The tax on coal applies if the coal is used by the producer in other than a mining process. Amended tax form 1040x A mining process means the same for this purpose as for percentage depletion. Amended tax form 1040x For example, the tax does not apply if, before selling the coal, you break it, clean it, size it, or apply any other process considered mining under the rules for depletion. Amended tax form 1040x In this case, the tax applies only when you sell the coal. Amended tax form 1040x The tax does not apply to coal used as fuel in the coal drying process since it is considered to be used in a mining process. Amended tax form 1040x However, the tax does apply when you use the coal as fuel or as an ingredient in making coke since the coal is not used in a mining process. Amended tax form 1040x   You must use a constructive sale price to figure the tax under the 4. Amended tax form 1040x 4% rate if you use the coal in other than a mining process. Amended tax form 1040x Base your constructive sale price on sales of a like kind and grade of coal by you or other producers made f. Amended tax form 1040x o. Amended tax form 1040x b. Amended tax form 1040x mine or cleaning plant. Amended tax form 1040x Normally, you use the same constructive price used to figure your percentage depletion deduction. Amended tax form 1040x Blending. Amended tax form 1040x   If you blend surface-mined coal with underground-mined coal during the cleaning process, you must figure the excise tax on the sale of the blended, cleaned coal. Amended tax form 1040x Figure the tax separately for each type of coal in the blend. Amended tax form 1040x Base the tax on the amount of each type in the blend if you can determine the proportion of each type of coal contained in the final blend. Amended tax form 1040x Base the tax on the ratio of each type originally put into the cleaning process if you cannot determine the proportion of each type of coal in the blend. Amended tax form 1040x However, the tax is limited to 4. Amended tax form 1040x 4% of the sale price per ton of the blended coal. Amended tax form 1040x Exemption from tax. Amended tax form 1040x   The tax does not apply to sales of lignite and imported coal. Amended tax form 1040x The only other exemption from the tax on the sale of coal is for coal exported as discussed next. Amended tax form 1040x Exported. Amended tax form 1040x   The tax does not apply to the sale of coal if the coal is in the stream of export when sold by the producer and the coal is actually exported. Amended tax form 1040x   Coal is in the stream of export when sold by the producer if the sale is a step in the exportation of the coal to its ultimate destination in a foreign country. Amended tax form 1040x For example, coal is in the stream of export when: The coal is loaded on an export vessel and title is transferred from the producer to a foreign purchaser, or The producer sells the coal to an export broker in the United States under terms of a contract showing that the coal is to be shipped to a foreign country. Amended tax form 1040x   Proof of export includes any of the following items. Amended tax form 1040x A copy of the export bill of lading issued by the delivering carrier. Amended tax form 1040x A certificate signed by the export carrier's agent or representative showing actual exportation of the coal. Amended tax form 1040x A certificate of landing signed by a customs officer of the foreign country to which the coal is exported. Amended tax form 1040x If the foreign country does not have a customs administrator, a statement of the foreign consignee showing receipt of the coal. Amended tax form 1040x Taxable Tires Taxable tires are divided into three categories for reporting and figuring the tax as described below. Amended tax form 1040x A tax is imposed on taxable tires sold by the manufacturer, producer, or importer at the rate of $. Amended tax form 1040x 0945 ($. Amended tax form 1040x 04725 in the case of a biasply tire or super single tire) for each 10 pounds of the maximum rated load capacity over 3,500 pounds. Amended tax form 1040x The three categories for reporting the tax and the tax rate are listed below. Amended tax form 1040x Taxable tires other than biasply or super single tires at $. Amended tax form 1040x 0945. Amended tax form 1040x Taxable tires, biasply or super single tires (other than super single tires designed for steering) at $. Amended tax form 1040x 04725. Amended tax form 1040x Taxable tires, super single tires designed for steering at $. Amended tax form 1040x 0945. Amended tax form 1040x A taxable tire is any tire of the type used on highway vehicles if wholly or partially made of rubber and if marked according to federal regulations for highway use. Amended tax form 1040x A biasply tire is a pneumatic tire on which the ply cords that extend to the beads are laid at alternate angles substantially less than 90 degrees to the centerline of the tread. Amended tax form 1040x A super single tire is a tire greater than 13 inches in cross section width designed to replace 2 tires in a dual fitment. Amended tax form 1040x Special rule, manufacturer's retail stores. Amended tax form 1040x   The excise tax on taxable tires is imposed at the time the taxable tires are delivered to the manufacturer-owned retail stores, not at the time of sale. Amended tax form 1040x Tires on imported articles. Amended tax form 1040x   The importer of an article equipped with taxable tires is treated as the manufacturer of the tires and is liable for the taxable tire excise tax when the article is sold (except in the case of an automobile bus chassis or body with tires). Amended tax form 1040x Tires exempt from tax. Amended tax form 1040x   The tax on taxable tires does not apply to the following items. Amended tax form 1040x Domestically recapped or retreaded tires if the tires have been sold previously in the United States and were taxable tires at the time of sale. Amended tax form 1040x Tire carcasses not suitable for commercial use. Amended tax form 1040x Tires for use on qualifying intercity, local, and school buses. Amended tax form 1040x For tax-free treatment, the registration requirements discussed earlier under Requirements for Exempt Sales apply. Amended tax form 1040x Tires sold for the exclusive use of the Department of Defense or the Coast Guard. Amended tax form 1040x Tires of a type used exclusively on mobile machinery. Amended tax form 1040x A taxable tire used on mobile machinery is not exempt from tax. Amended tax form 1040x Qualifying intercity or local bus. Amended tax form 1040x   This is any bus used mainly (more than 50%) to transport the general public for a fee and that either operates on a schedule along regular routes or seats at least 20 adults (excluding the driver). Amended tax form 1040x Qualifying school bus. Amended tax form 1040x   This is any bus substantially all the use (85% or more) of which is to transport students and employees of schools. Amended tax form 1040x Credit or refund. Amended tax form 1040x   A credit or refund (without interest) is allowable on tax-paid tires if the tires have been: Exported; Sold to a state or local government for its exclusive use; Sold to a nonprofit educational organization for its exclusive use (as defined under Communications Tax in chapter 4); Sold to a qualified blood collector organization (as defined under Communications Tax in chapter 4) for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood; Used or sold for use as supplies for vessels; or Sold in connection with qualified intercity, local, or school buses. Amended tax form 1040x   Also, a credit or refund (without interest) is allowable on tax-paid tires sold by any person on, or in connection with, any other article that is sold or used in an activity listed above. Amended tax form 1040x   The person who paid the tax is eligible to make the claim. Amended tax form 1040x Gas Guzzler Tax Tax is imposed on the sale by the manufacturer of automobiles of a model type that has a fuel economy standard as measured by the Environmental Protection Agency (EPA) of less than 22. Amended tax form 1040x 5 miles per gallon. Amended tax form 1040x If you import an automobile for personal use, you may be liable for this tax. Amended tax form 1040x Figure the tax on Form 6197, as discussed later. Amended tax form 1040x The tax rate is based on fuel economy rating. Amended tax form 1040x The tax rates for the gas guzzler tax are shown on Form 6197. Amended tax form 1040x A person that lengthens an existing automobile is the manufacturer of an automobile. Amended tax form 1040x Automobiles. Amended tax form 1040x   An automobile (including limousines) means any four-wheeled vehicle that is: Rated at an unloaded gross vehicle weight of 6,000 pounds or less, Propelled by an engine powered by gasoline or diesel fuel, and Intended for use mainly on public streets, roads, and highways. Amended tax form 1040x Vehicles not subject to tax. Amended tax form 1040x   For the gas guzzler tax, the following vehicles are not considered automobiles. Amended tax form 1040x Limousines with a gross unloaded vehicle weight of more than 6,000 pounds. Amended tax form 1040x Vehicles operated exclusively on a rail or rails. Amended tax form 1040x Vehicles sold for use and used primarily: As ambulances or combination ambulance-hearses, For police or other law enforcement purposes by federal, state, or local governments, or For firefighting purposes. Amended tax form 1040x Vehicles treated under 49 U. Amended tax form 1040x S. Amended tax form 1040x C. Amended tax form 1040x 32901 (1978) as non-passenger automobiles. Amended tax form 1040x This includes limousines manufactured primarily to transport more than 10 persons. Amended tax form 1040x   The manufacturer can sell a vehicle described in item (3) tax free only when the sale is made directly to a purchaser for the described emergency use and the manufacturer and purchaser (other than a state or local government) are registered. Amended tax form 1040x   Treat an Indian tribal government as a state only if the police or other law enforcement purposes are an essential tribal government function. Amended tax form 1040x Model type. Amended tax form 1040x   Model type is a particular class of automobile as determined by EPA regulations. Amended tax form 1040x Fuel economy. Amended tax form 1040x   Fuel economy is the average number of miles an automobile travels on a gallon of gasoline (or diesel fuel) rounded to the nearest 0. Amended tax form 1040x 1 mile as figured by the EPA. Amended tax form 1040x Imported automobiles. Amended tax form 1040x   The tax also applies to automobiles that do not have a prototype-based fuel economy rating assigned by the EPA. Amended tax form 1040x An automobile imported into the United States without a certificate of conformity to United States emission standards and that has no assigned fuel economy rating must be either: Converted by installation of emission controls to conform in all material respects to an automobile already certified for sale in the United States, or Modified by installation of emission control components and individually tested to demonstrate emission compliance. Amended tax form 1040x   An imported automobile that has been converted to conform to an automobile already certified for sale in the United States may use the fuel economy rating assigned to that certified automobile. Amended tax form 1040x   A fuel economy rating is not generally available for modified imported automobiles because the EPA does not require a highway fuel economy test on them. Amended tax form 1040x A separate highway fuel economy test would be required to devise a fuel economy rating (otherwise the automobile is presumed to fall within the lowest fuel economy rating category). Amended tax form 1040x   For more information about fuel economy ratings for imported automobiles, see Revenue Ruling 86-20 and Revenue Procedure 86-9 in Cumulative Bulletin 1986-1, and Revenue Procedure 87-10 in Cumulative Bulletin 1987-1. Amended tax form 1040x Exemptions. Amended tax form 1040x   No one is exempt from the gas guzzler tax, including the federal government, state and local governments, qualified blood collector organizations, and nonprofit educational organizations. Amended tax form 1040x However, see Vehicles not subject to tax, earlier. Amended tax form 1040x Form 6197. Amended tax form 1040x   Use Form 6197 to figure your tax liability for each quarter. Amended tax form 1040x Attach Form 6197 to your Form 720 for the quarter. Amended tax form 1040x See the Form 6197 instructions for more information and the one-time filing rules. Amended tax form 1040x Credit or refund. Amended tax form 1040x   If the manufacturer paid the tax on a vehicle that is used or resold for an emergency use (see item (3) under Vehicles not subject to tax), the manufacturer can claim a credit or refund. Amended tax form 1040x For information about how to file for credits or refunds, see the Instructions for Form 720 or Form 8849. Amended tax form 1040x Vaccines Tax is imposed on certain vaccines sold by the manufacturer in the United States. Amended tax form 1040x A taxable vaccine means any of the following vaccines. Amended tax form 1040x Any vaccine containing diphtheria toxoid. Amended tax form 1040x Any vaccine containing tetanus toxoid. Amended tax form 1040x Any vaccine containing pertussis bacteria, extracted or partial cell bacteria, or specific pertussis antigens. Amended tax form 1040x Any vaccine containing polio virus. Amended tax form 1040x Any vaccine against measles. Amended tax form 1040x Any vaccine against mumps. Amended tax form 1040x Any vaccine against rubella. Amended tax form 1040x Any vaccine against hepatitis A. Amended tax form 1040x Any vaccine against hepatitis B. Amended tax form 1040x Any vaccine against chicken pox. Amended tax form 1040x Any vaccine against rotavirus gastroenteritis. Amended tax form 1040x Any HIB vaccine. Amended tax form 1040x Any conjugate vaccine against streptococcus pneumoniae. Amended tax form 1040x Any trivalent vaccine against influenza or any other vaccine against influenza. Amended tax form 1040x Any meningococcal vaccine. Amended tax form 1040x Any vaccine against the human papillomavirus. Amended tax form 1040x The effective date for the tax on any vaccine against influenza, other than trivalent influenza vaccines, is the later of August 1, 2013, or the date the Secretary of Health and Human Services lists a vaccine against seasonal influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund. Amended tax form 1040x The tax is $. Amended tax form 1040x 75 per dose of each taxable vaccine. Amended tax form 1040x The tax per dose on a vaccine that contains more than one taxable vaccine is $. Amended tax form 1040x 75 times the number of taxable vaccines. Amended tax form 1040x Taxable use. Amended tax form 1040x   Any manufacturer (including a governmental entity) that uses a taxable vaccine before it is sold will be liable for the tax in the same manner as if the vaccine was sold by the manufacturer. Amended tax form 1040x Credit or refund. Amended tax form 1040x   A credit or refund (without interest) is available if the vaccine is: Returned to the person who paid the tax (other than for resale), or Destroyed. Amended tax form 1040x The claim for a credit or refund must be filed within 6 months after the vaccine is returned or destroyed. Amended tax form 1040x Conditions to allowance. Amended tax form 1040x   To claim a credit or refund, the person who paid the tax must have repaid or agreed to repay the tax to the ultimate purchaser of the vaccine or obtained the written consent of such purchaser to allowance of the credit or refund. Amended tax form 1040x Taxable Medical Devices Taxable medical devices. Amended tax form 1040x   The tax on the sale of certain medical devices by the manufacturer, producer, or importer of the device is 2. Amended tax form 1040x 3% (. Amended tax form 1040x 023) of the sales price. Amended tax form 1040x A taxable medical device is a device that is listed as a device with the Food and Drug Administration (FDA) under section 510(j) of the Federal Food, Drug, and Cosmetic Act and 21 CFR part 807, pursuant to FDA requirements. Amended tax form 1040x There are specific exemptions for eyeglasses, contact lenses, and hearing aids. Amended tax form 1040x There is also an exemption for devices that are determined by the Secretary to be of a type that are generally purchased by the general public at retail for individual use (this exemption is known as the retail exemption). Amended tax form 1040x See T. Amended tax form 1040x D. Amended tax form 1040x 9604 for information on how to determine whether a device falls within the retail exemption, and examples of how a taxpayer might evaluate a given device. Amended tax form 1040x More information. Amended tax form 1040x   For more information on the medical device tax, see section 4191, T. Amended tax form 1040x D. Amended tax form 1040x 9604, and Notice 2012-77. Amended tax form 1040x You can find T. Amended tax form 1040x D. Amended tax form 1040x 9604 and Notice 2012-77 on pages 730 and 781, respectively, of I. Amended tax form 1040x R. Amended tax form 1040x B. Amended tax form 1040x 2012-52 at www. Amended tax form 1040x irs. Amended tax form 1040x gov/pub/irs-irbs/irb12-52. Amended tax form 1040x pdf. Amended tax form 1040x Prev  Up  Next   Home   More Online Publications
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The Amended Tax Form 1040x

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