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File 2010 Taxes Turbotax

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File 2010 taxes turbotax Publication 584-B - Main Content Table of Contents How To Use This Workbook Comments and SuggestionsOrdering forms and publications. File 2010 taxes turbotax Tax questions. File 2010 taxes turbotax How To Get Tax HelpLow Income Taxpayer Clinics (LITCs). File 2010 taxes turbotax How To Use This Workbook You can use this workbook by following these five steps. File 2010 taxes turbotax Read Publication 547 to learn about the tax rules for casualties, disasters, and thefts. File 2010 taxes turbotax Know the definitions of adjusted basis and fair market value, discussed below. File 2010 taxes turbotax Fill out Schedules 1 through 6. File 2010 taxes turbotax Read the Instructions for Form 4684. File 2010 taxes turbotax Fill out Form 4684 using the information you entered in Schedules 1 through 6. File 2010 taxes turbotax Use the chart below to find out how to use Schedules 1 through 6 to fill out Form 4684. File 2010 taxes turbotax Take what's in each row of. File 2010 taxes turbotax . File 2010 taxes turbotax . File 2010 taxes turbotax And enter it on Form 4684. File 2010 taxes turbotax . File 2010 taxes turbotax . File 2010 taxes turbotax Column 1 Line 19 Column 2 Line 20 Column 3 Line 21 Column 4 Line 22 Column 5 Line 23 Column 6 Line 24 Column 7 Line 25 Column 8 Line 26 Column 9 Line 27 Adjusted basis. File 2010 taxes turbotax   Adjusted basis usually means original cost plus improvements, minus depreciation allowed or allowable (including any section 179 expense deduction), amortization, depletion, etc. File 2010 taxes turbotax If you did not acquire the property by purchasing it, your basis is determined as discussed in Publication 551, Basis of Assets. File 2010 taxes turbotax If you inherited the property from someone who died in 2010 and the executor of the decedent's estate made the election to file Form 8939, Allocation of Increase in Basis for Property Received From a Decedent, refer to the information provided by the executor or see Publication 4895, Tax Treatment of Property Acquired From a Decedent Dying in 2010. File 2010 taxes turbotax Fair market value. File 2010 taxes turbotax   Fair market value is the price for which you could sell your property to a willing buyer, when neither of you has to sell or buy and both of you know all the relevant facts. File 2010 taxes turbotax When filling out Schedules 1 through 6, you need to know the fair market value of the property immediately before and immediately after the disaster or casualty. File 2010 taxes turbotax Deduction limits. File 2010 taxes turbotax   If your casualty or theft loss involved a home you used for business or rented out, your deductible loss may be limited. File 2010 taxes turbotax See the Instructions for Form 4684, Section B. File 2010 taxes turbotax If the casualty or theft loss involved property used in a passive activity, see Form 8582, Passive Activity Loss Limitations, and its instructions. File 2010 taxes turbotax   The casualty and theft loss deduction for employee property, when added to your job expenses and most other miscellaneous itemized deductions on Schedule A (Form 1040), must be reduced by 2% of your adjusted gross income. File 2010 taxes turbotax Employee property is property used in performing services as an employee. File 2010 taxes turbotax Comments and Suggestions We welcome your comments about this publication and your suggestions for future editions. File 2010 taxes turbotax You can write to us at the following address: Internal Revenue Service Individual Forms and Publications Branch SE:W:CAR:MP:T:I 1111 Constitution Ave. File 2010 taxes turbotax NW, IR-6526 Washington, DC 20224 We respond to many letters by telephone. File 2010 taxes turbotax Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File 2010 taxes turbotax You can email us at taxforms@irs. File 2010 taxes turbotax gov. File 2010 taxes turbotax Please put “Publications Comment” on the subject line. File 2010 taxes turbotax You can also send us comments from www. File 2010 taxes turbotax irs. File 2010 taxes turbotax gov/formspubs/. File 2010 taxes turbotax Select “Comment on Tax Forms and Publications” under “Information about. File 2010 taxes turbotax ” Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File 2010 taxes turbotax Ordering forms and publications. File 2010 taxes turbotax   Visit www. File 2010 taxes turbotax irs. File 2010 taxes turbotax gov/formspubs/ to download forms and publications, call 1-800-829-3676, or write to the address below and receive a response within 10 days after your request is received. File 2010 taxes turbotax Internal Revenue Service 1201 N. File 2010 taxes turbotax Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File 2010 taxes turbotax   If you have a tax question, check the information available on IRS. File 2010 taxes turbotax gov or call 1-800-829-1040. File 2010 taxes turbotax We cannot answer tax questions sent to either of the above addresses. 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File 2010 taxes turbotax Call 1-800-829-4477 to listen to pre-recorded messages covering various tax topics. File 2010 taxes turbotax Refund information. File 2010 taxes turbotax You can check the status of your refund on the new IRS phone app. File 2010 taxes turbotax Download the free IRS2Go app by visiting the iTunes app store or the Android Marketplace. File 2010 taxes turbotax IRS2Go is a new way to provide you with information and tools. File 2010 taxes turbotax To check the status of your refund by phone, call 1-800-829-4477 (automated refund information 24 hours a day, 7 days a week). File 2010 taxes turbotax Wait at least 72 hours after the IRS acknowledges receipt of your e-filed return, or 3 to 4 weeks after mailing a paper return. File 2010 taxes turbotax If you filed Form 8379 with your return, wait 14 weeks (11 weeks if you filed electronically). File 2010 taxes turbotax Have your 2011 tax return available so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. File 2010 taxes turbotax If you check the status of your refund and are not given the date it will be issued, please wait until the next week before checking back. File 2010 taxes turbotax Other refund information. File 2010 taxes turbotax To check the status of a prior-year refund or amended return refund, call 1-800-829-1040. File 2010 taxes turbotax Evaluating the quality of our telephone services. File 2010 taxes turbotax To ensure IRS representatives give accurate, courteous, and professional answers, we use several methods to evaluate the quality of our telephone services. File 2010 taxes turbotax One method is for a second IRS representative to listen in on or record random telephone calls. File 2010 taxes turbotax Another is to ask some callers to complete a short survey at the end of the call. 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Tax Relief for Victims of Hurricane Sandy in New York

Updated 2/4/13 The IRS announced additional tax relief, further extending certain tax deadlines until April 1 for Nassau, Queens, Richmond and Suffolk counties. 

Updated 11/13/12 to add Orange, Putnam, Sullivan and Ulster counties.

NY-2012-47, Nov. 7, 2012

NEW YORK — Victims of Hurricane Sandy that began on Oct. 27, 2012 in parts of New York may qualify for tax relief from the Internal Revenue Service.

The President has declared Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Sullivan, Suffolk, Ulster and Westchester counties a federal disaster area. Individuals who reside or have a business in these counties may qualify for tax relief.

The declaration permits the IRS to postpone certain deadlines for taxpayers who reside or have a business in the disaster area. For instance, certain deadlines falling on or after Oct. 27, and on or before Feb. 1, have been postponed to Feb. 1, 2013.  

In addition, the IRS is waiving the failure-to-deposit penalties for employment and excise tax deposits due on or after Oct. 27, and on or before Nov. 26, as long as the deposits are made by Nov. 26, 2012.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, that falls within the postponement period.

The IRS automatically identifies taxpayers located in the covered disaster area and applies automatic filing and payment relief. But affected taxpayers who reside or have a business located outside the covered disaster area need to call the IRS disaster hotline at 866-562-5227 to request this tax relief.

For a full description of the relief being provided by the IRS to the victims of Hurricane Sandy, visit IRS.gov.

Covered Disaster Area

The counties above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose records necessary to meet a deadline listed in Treas. Reg. § 301.7508A-1(c) are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area and any individual visiting the covered disaster area who was killed or injured as a result of the disaster are entitled to relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Feb. 1 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Oct. 27 and on or before Feb. 1.

The IRS also gives affected taxpayers until Feb. 1 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (Aug. 20, 2007), that are due to be performed on or after Oct. 27 and on or before Feb. 1.

This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise tax deposits due on or after Oct. 27 and on or before Nov. 26 provided the taxpayer makes these deposits by Nov. 26.

Casualty Losses

Affected taxpayers in a federally declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements. For details, see Form 4684 and its instructions.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “New York/Hurricane Sandy” at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from the official IRS website, irs.gov, or order them by calling 800-TAX-FORM (800-829-3676). The IRS toll-free number for general tax questions is 800-829-1040.

Related Information

Disaster Assistance and Emergency Relief for Individuals and Businesses

Recent IRS Disaster Relief Announcements

 

Page Last Reviewed or Updated: 28-Oct-2013

The File 2010 Taxes Turbotax

File 2010 taxes turbotax 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. 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File 2010 taxes turbotax This is true even if the other person does not actually claim your exemption. File 2010 taxes turbotax Each spouse who is an eligible individual who wants an HSA must open a separate HSA. File 2010 taxes turbotax You cannot have a joint HSA. File 2010 taxes turbotax High deductible health plan (HDHP). File 2010 taxes turbotax   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. File 2010 taxes turbotax Out-of-pocket expenses include copayments and other amounts, but do not include premiums. File 2010 taxes turbotax   An HDHP may provide preventive care benefits without a deductible or with a deductible less than the minimum annual deductible. File 2010 taxes turbotax Preventive care includes, but is not limited to, the following. File 2010 taxes turbotax Periodic health evaluations, including tests and diagnostic procedures ordered in connection with routine examinations, such as annual physicals. File 2010 taxes turbotax Routine prenatal and well-child care. File 2010 taxes turbotax Child and adult immunizations. File 2010 taxes turbotax Tobacco cessation programs. File 2010 taxes turbotax Obesity weight-loss programs. File 2010 taxes turbotax Screening services. File 2010 taxes turbotax This includes screening services for the following: Cancer. File 2010 taxes turbotax Heart and vascular diseases. File 2010 taxes turbotax Infectious diseases. File 2010 taxes turbotax Mental health conditions. File 2010 taxes turbotax Substance abuse. File 2010 taxes turbotax Metabolic, nutritional, and endocrine conditions. File 2010 taxes turbotax Musculoskeletal disorders. File 2010 taxes turbotax Obstetric and gynecological conditions. File 2010 taxes turbotax Pediatric conditions. File 2010 taxes turbotax Vision and hearing disorders. File 2010 taxes turbotax For more information on screening services, see Notice 2004-23, 2004-15 I. File 2010 taxes turbotax R. File 2010 taxes turbotax B. File 2010 taxes turbotax 725 available at www. File 2010 taxes turbotax irs. File 2010 taxes turbotax gov/irb/2004-15_IRB/ar10. File 2010 taxes turbotax html. File 2010 taxes turbotax     The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2013. File 2010 taxes turbotax      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. File 2010 taxes turbotax Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. File 2010 taxes turbotax    The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2014. File 2010 taxes turbotax      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. File 2010 taxes turbotax Instead, only deductibles and out-of-pocket expenses for services within the network should be used to figure whether the limit applies. File 2010 taxes turbotax   Self-only HDHP coverage is an HDHP covering only an eligible individual. File 2010 taxes turbotax 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). File 2010 taxes turbotax Example. File 2010 taxes turbotax An eligible individual and his dependent child are covered under an “employee plus one” HDHP offered by the individual's employer. File 2010 taxes turbotax This is family HDHP coverage. File 2010 taxes turbotax Family plans that do not meet the high deductible rules. File 2010 taxes turbotax   There are some family plans that have deductibles for both the family as a whole and for individual family members. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Example. File 2010 taxes turbotax You have family health insurance coverage in 2013. File 2010 taxes turbotax The annual deductible for the family plan is $3,500. File 2010 taxes turbotax This plan also has an individual deductible of $1,500 for each family member. File 2010 taxes turbotax 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. File 2010 taxes turbotax Other health coverage. File 2010 taxes turbotax   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. File 2010 taxes turbotax However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. File 2010 taxes turbotax    You can have additional insurance that provides benefits only for the following items. File 2010 taxes turbotax Liabilities incurred under workers' compensation laws, tort liabilities, or liabilities related to ownership or use of property. File 2010 taxes turbotax A specific disease or illness. File 2010 taxes turbotax A fixed amount per day (or other period) of hospitalization. File 2010 taxes turbotax   You can also have coverage (whether provided through insurance or otherwise) for the following items. File 2010 taxes turbotax Accidents. File 2010 taxes turbotax Disability. File 2010 taxes turbotax Dental care. File 2010 taxes turbotax Vision care. File 2010 taxes turbotax Long-term care. File 2010 taxes turbotax    Plans in which substantially all of the coverage is through the items listed earlier are not HDHPs. File 2010 taxes turbotax 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. File 2010 taxes turbotax Prescription drug plans. File 2010 taxes turbotax   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. File 2010 taxes turbotax If you can receive benefits before that deductible is met, you are not an eligible individual. File 2010 taxes turbotax Other employee health plans. File 2010 taxes turbotax   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. File 2010 taxes turbotax Health FSAs and HRAs are discussed later. File 2010 taxes turbotax   However, an employee can make contributions to an HSA while covered under an HDHP and one or more of the following arrangements. File 2010 taxes turbotax Limited-purpose health FSA or HRA. File 2010 taxes turbotax These arrangements can pay or reimburse the items listed earlier under Other health coverage except long-term care. File 2010 taxes turbotax Also, these arrangements can pay or reimburse preventive care expenses because they can be paid without having to satisfy the deductible. File 2010 taxes turbotax Suspended HRA. File 2010 taxes turbotax Before the beginning of an HRA coverage period, you can elect to suspend the HRA. File 2010 taxes turbotax 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. File 2010 taxes turbotax When the suspension period ends, you are no longer eligible to make contributions to an HSA. File 2010 taxes turbotax Post-deductible health FSA or HRA. File 2010 taxes turbotax These arrangements do not pay or reimburse any medical expenses incurred before the minimum annual deductible amount is met. File 2010 taxes turbotax 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. File 2010 taxes turbotax Retirement HRA. File 2010 taxes turbotax This arrangement pays or reimburses only those medical expenses incurred after retirement. File 2010 taxes turbotax After retirement you are no longer eligible to make contributions to an HSA. File 2010 taxes turbotax Health FSA – grace period. File 2010 taxes turbotax   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. File 2010 taxes turbotax See Flexible Spending Arrangements (FSAs) , later. File 2010 taxes turbotax Contributions to an HSA Any eligible individual can contribute to an HSA. File 2010 taxes turbotax For an employee's HSA, the employee, the employee's employer, or both may contribute to the employee's HSA in the same year. File 2010 taxes turbotax For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. File 2010 taxes turbotax Family members or any other person may also make contributions on behalf of an eligible individual. File 2010 taxes turbotax Contributions to an HSA must be made in cash. File 2010 taxes turbotax Contributions of stock or property are not allowed. File 2010 taxes turbotax 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. File 2010 taxes turbotax For 2013, if you have self-only HDHP coverage, you can contribute up to $3,250. File 2010 taxes turbotax If you have family HDHP coverage, you can contribute up to $6,450. File 2010 taxes turbotax For 2014, if you have self-only HDHP coverage, you can contribute up to $3,300. File 2010 taxes turbotax If you have family HDHP coverage you can contribute up to $6,550. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Last-month rule. File 2010 taxes turbotax   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. File 2010 taxes turbotax You are treated as having the same HDHP coverage for the entire year as you had on the first day of the last month. File 2010 taxes turbotax Testing period. File 2010 taxes turbotax   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. File 2010 taxes turbotax 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. File 2010 taxes turbotax For example, December 1, 2013, through December 31, 2014. File 2010 taxes turbotax   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. File 2010 taxes turbotax You include this amount in your income in the year in which you fail to be an eligible individual. File 2010 taxes turbotax This amount is also subject to a 10% additional tax. File 2010 taxes turbotax The income and additional tax are shown on Form 8889, Part III. File 2010 taxes turbotax Example 1. File 2010 taxes turbotax Chris, age 53, becomes an eligible individual on December 1, 2013. File 2010 taxes turbotax He has family HDHP coverage on that date. File 2010 taxes turbotax Under the last-month rule, he contributes $6,450 to his HSA. File 2010 taxes turbotax Chris fails to be an eligible individual in June 2014. File 2010 taxes turbotax 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. File 2010 taxes turbotax Chris uses the worksheet in the Form 8889 instructions to determine this amount. File 2010 taxes turbotax 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. File 2010 taxes turbotax 00 Total for all months $6,450. File 2010 taxes turbotax 00 Limitation. File 2010 taxes turbotax Divide the total by 12 $537. File 2010 taxes turbotax 50 Chris would include $5,912. File 2010 taxes turbotax 50 ($6,450. File 2010 taxes turbotax 00 – $537. File 2010 taxes turbotax 50) in his gross income on his 2014 tax return. File 2010 taxes turbotax Also, a 10% additional tax applies to this amount. File 2010 taxes turbotax Example 2. File 2010 taxes turbotax Erika, age 39, has self-only HDHP coverage on January 1, 2013. File 2010 taxes turbotax Erika changes to family HDHP coverage on November 1, 2013. File 2010 taxes turbotax Because Erika has family HDHP coverage on December 1, 2013, she contributes $6,450 for 2013. File 2010 taxes turbotax Erika fails to be an eligible individual in March 2014. File 2010 taxes turbotax 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. File 2010 taxes turbotax Erika uses the worksheet in the Form 8889 instructions to determine this amount. File 2010 taxes turbotax January $3,250. File 2010 taxes turbotax 00 February $3,250. File 2010 taxes turbotax 00 March $3,250. File 2010 taxes turbotax 00 April $3,250. File 2010 taxes turbotax 00 May $3,250. File 2010 taxes turbotax 00 June $3,250. File 2010 taxes turbotax 00 July $3,250. File 2010 taxes turbotax 00 August $3,250. File 2010 taxes turbotax 00 September $3,250. File 2010 taxes turbotax 00 October $3,250. File 2010 taxes turbotax 00 November $6,450. File 2010 taxes turbotax 00 December $6,450. File 2010 taxes turbotax 00 Total for all months $45,400. File 2010 taxes turbotax 00 Limitation. File 2010 taxes turbotax Divide the total by 12 $3,783. File 2010 taxes turbotax 34 Erika would include $2,666. File 2010 taxes turbotax 67 ($6,450 – $3,783. File 2010 taxes turbotax 34) in her gross income on her 2014 tax return. File 2010 taxes turbotax Also, a 10% additional tax applies to this amount. File 2010 taxes turbotax Additional contribution. File 2010 taxes turbotax   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. File 2010 taxes turbotax 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). File 2010 taxes turbotax However, see Enrolled in Medicare , later. File 2010 taxes turbotax If you have more than one HSA in 2013, your total contributions to all the HSAs cannot be more than the limits discussed earlier. File 2010 taxes turbotax Reduction of contribution limit. File 2010 taxes turbotax   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. File 2010 taxes turbotax A special rule applies to married people, discussed next, if each spouse has family coverage under an HDHP. File 2010 taxes turbotax Rules for married people. File 2010 taxes turbotax   If either spouse has family HDHP coverage, both spouses are treated as having family HDHP coverage. File 2010 taxes turbotax If each spouse has family coverage under a separate plan, the contribution limit for 2013 is $6,450. File 2010 taxes turbotax You must reduce the limit on contributions, before taking into account any additional contributions, by the amount contributed to both spouses' Archer MSAs. File 2010 taxes turbotax After that reduction, the contribution limit is split equally between the spouses unless you agree on a different division. File 2010 taxes turbotax The rules for married people apply only if both spouses are eligible individuals. File 2010 taxes turbotax If both spouses are 55 or older and not enrolled in Medicare, each spouse's contribution limit is increased by the additional contribution. File 2010 taxes turbotax If both spouses meet the age requirement, the total contributions under family coverage cannot be more than $8,450. File 2010 taxes turbotax Each spouse must make the additional contribution to his or her own HSA. File 2010 taxes turbotax Example. File 2010 taxes turbotax For 2013, Mr. File 2010 taxes turbotax Auburn and his wife are both eligible individuals. File 2010 taxes turbotax They each have family coverage under separate HDHPs. File 2010 taxes turbotax Mr. File 2010 taxes turbotax Auburn is 58 years old and Mrs. File 2010 taxes turbotax Auburn is 53. File 2010 taxes turbotax Mr. File 2010 taxes turbotax and Mrs. File 2010 taxes turbotax Auburn can split the family contribution limit ($6,450) equally or they can agree on a different division. File 2010 taxes turbotax If they split it equally, Mr. File 2010 taxes turbotax Auburn can contribute $4,225 to an HSA (one-half the maximum contribution for family coverage ($3,225) + $1,000 additional contribution) and Mrs. File 2010 taxes turbotax Auburn can contribute $3,225 to an HSA. File 2010 taxes turbotax Employer contributions. File 2010 taxes turbotax   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. File 2010 taxes turbotax This includes amounts contributed to your account by your employer through a cafeteria plan. File 2010 taxes turbotax Enrolled in Medicare. File 2010 taxes turbotax   Beginning with the first month you are enrolled in Medicare, your contribution limit is zero. File 2010 taxes turbotax Example. File 2010 taxes turbotax You turned age 65 in July 2013 and enrolled in Medicare. File 2010 taxes turbotax You had an HDHP with self-only coverage and are eligible for an additional contribution of $1,000. File 2010 taxes turbotax Your contribution limit is $2,125 ($4,250 × 6 ÷ 12). File 2010 taxes turbotax Qualified HSA funding distribution. File 2010 taxes turbotax   A qualified HSA funding distribution may be made from your traditional IRA or Roth IRA to your HSA. File 2010 taxes turbotax This distribution cannot be made from an ongoing SEP IRA or SIMPLE IRA. File 2010 taxes turbotax 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. File 2010 taxes turbotax   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. File 2010 taxes turbotax The distribution must be made directly by the trustee of the IRA to the trustee of the HSA. File 2010 taxes turbotax The distribution is not included in your income, is not deductible, and reduces the amount that can be contributed to your HSA. File 2010 taxes turbotax The qualified HSA funding distribution is shown on Form 8889 for the year in which the distribution is made. File 2010 taxes turbotax   You can make only one qualified HSA funding distribution during your lifetime. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Example. File 2010 taxes turbotax In 2013, you are an eligible individual, age 57, with self-only HDHP coverage. File 2010 taxes turbotax You can make a qualified HSA funding distribution of $4,250 ($3,250 plus $1,000 additional contribution). File 2010 taxes turbotax Funding distribution – testing period. File 2010 taxes turbotax   You must remain an eligible individual during the testing period. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax   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. File 2010 taxes turbotax You include this amount in income in the year in which you fail to be an eligible individual. File 2010 taxes turbotax This amount is also subject to a 10% additional tax. File 2010 taxes turbotax The income and the additional tax are shown on Form 8889, Part III. File 2010 taxes turbotax   Each qualified HSA funding distribution allowed has its own testing period. File 2010 taxes turbotax For example, you are an eligible individual, age 45, with self-only HDHP coverage. File 2010 taxes turbotax On June 18, 2013, you make a qualified HSA funding distribution of $3,250. File 2010 taxes turbotax 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. File 2010 taxes turbotax Your testing period for the first distribution begins in June 2013 and ends on June 30, 2014. File 2010 taxes turbotax Your testing period for the second distribution begins in August 2013 and ends on August 31, 2014. File 2010 taxes turbotax   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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Rollovers A rollover contribution is not included in your income, is not deductible, and does not reduce your contribution limit. File 2010 taxes turbotax Archer MSAs and other HSAs. File 2010 taxes turbotax   You can roll over amounts from Archer MSAs and other HSAs into an HSA. File 2010 taxes turbotax You do not have to be an eligible individual to make a rollover contribution from your existing HSA to a new HSA. File 2010 taxes turbotax Rollover contributions do not need to be in cash. File 2010 taxes turbotax Rollovers are not subject to the annual contribution limits. File 2010 taxes turbotax   You must roll over the amount within 60 days after the date of receipt. File 2010 taxes turbotax You can make only one rollover contribution to an HSA during a 1-year period. File 2010 taxes turbotax Note. File 2010 taxes turbotax 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. File 2010 taxes turbotax There is no limit on the number of these transfers. File 2010 taxes turbotax Do not include the amount transferred in income, deduct it as a contribution, or include it as a distribution on Form 8889. File 2010 taxes turbotax When To Contribute You can make contributions to your HSA for 2013 until April 15, 2014. File 2010 taxes turbotax 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. File 2010 taxes turbotax Your employer can make contributions to your HSA between January 1, 2014, and April 15, 2014, that are allocated to 2013. File 2010 taxes turbotax Your employer must notify you and the trustee of your HSA that the contribution is for 2013. File 2010 taxes turbotax The contribution will be reported on your 2014 Form W-2. File 2010 taxes turbotax Reporting Contributions on Your Return Contributions made by your employer are not included in your income. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Contributions by a partnership to a bona fide partner's HSA are not contributions by an employer. File 2010 taxes turbotax The contributions are treated as a distribution of money and are not included in the partner's gross income. File 2010 taxes turbotax 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. File 2010 taxes turbotax In both situations, the partner can deduct the contribution made to the partner's HSA. File 2010 taxes turbotax 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. File 2010 taxes turbotax The shareholder-employee can deduct the contribution made to the shareholder-employee's HSA. File 2010 taxes turbotax Form 8889. File 2010 taxes turbotax   Report all contributions to your HSA on Form 8889 and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax You should include all contributions made for 2013, including those made by April 15, 2014, that are designated for 2013. File 2010 taxes turbotax Contributions made by your employer and qualified HSA funding distributions are also shown on the form. File 2010 taxes turbotax   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. File 2010 taxes turbotax Your employer's contributions also will be shown in box 12 of Form W-2, Wage and Tax Statement, with code W. File 2010 taxes turbotax Follow the instructions for Form 8889. File 2010 taxes turbotax Report your HSA deduction on Form 1040 or Form 1040NR. File 2010 taxes turbotax Excess contributions. File 2010 taxes turbotax   You will have excess contributions if the contributions to your HSA for the year are greater than the limits discussed earlier. File 2010 taxes turbotax Excess contributions are not deductible. File 2010 taxes turbotax Excess contributions made by your employer are included in your gross income. File 2010 taxes turbotax 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. File 2010 taxes turbotax   Generally, you must pay a 6% excise tax on excess contributions. File 2010 taxes turbotax See Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. File 2010 taxes turbotax The excise tax applies to each tax year the excess contribution remains in the account. File 2010 taxes turbotax   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. File 2010 taxes turbotax You withdraw the excess contributions by the due date, including extensions, of your tax return for the year the contributions were made. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax If you withdraw any of those amounts, the amount is treated the same as any other distribution from an HSA, discussed later. File 2010 taxes turbotax Deducting an excess contribution in a later year. File 2010 taxes turbotax   You may be able to deduct excess contributions for previous years that are still in your HSA. File 2010 taxes turbotax The excess contribution you can deduct for the current year is the lesser of the following two amounts. File 2010 taxes turbotax Your maximum HSA contribution limit for the year minus any amounts contributed to your HSA for the year. File 2010 taxes turbotax The total excess contributions in your HSA at the beginning of the year. File 2010 taxes turbotax   Amounts contributed for the year include contributions by you, your employer, and any other person. File 2010 taxes turbotax They also include any qualified HSA funding distribution made to your HSA. File 2010 taxes turbotax Any excess contribution remaining at the end of a tax year is subject to the excise tax. File 2010 taxes turbotax See Form 5329. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax You do not have to make distributions from your HSA each year. File 2010 taxes turbotax If you are no longer an eligible individual, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. File 2010 taxes turbotax Generally, a distribution is money you get from your health savings account. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Qualified medical expenses. File 2010 taxes turbotax   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. File 2010 taxes turbotax These are explained in Publication 502, Medical and Dental Expenses. File 2010 taxes turbotax   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for HSA purposes. File 2010 taxes turbotax 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. File 2010 taxes turbotax   For HSA purposes, expenses incurred before you establish your HSA are not qualified medical expenses. File 2010 taxes turbotax State law determines when an HSA is established. File 2010 taxes turbotax 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. File 2010 taxes turbotax   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. File 2010 taxes turbotax   Qualified medical expenses are those incurred by the following persons. File 2010 taxes turbotax You and your spouse. File 2010 taxes turbotax All dependents you claim on your tax return. File 2010 taxes turbotax 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. File 2010 taxes turbotax    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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Insurance premiums. File 2010 taxes turbotax   You cannot treat insurance premiums as qualified medical expenses unless the premiums are for: Long-term care insurance. File 2010 taxes turbotax Health care continuation coverage (such as coverage under COBRA). File 2010 taxes turbotax Health care coverage while receiving unemployment compensation under federal or state law. File 2010 taxes turbotax Medicare and other health care coverage if you were 65 or older (other than premiums for a Medicare supplemental policy, such as Medigap). File 2010 taxes turbotax   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. File 2010 taxes turbotax See Limit on long-term care premiums you can deduct in the instructions for Schedule A (Form 1040). File 2010 taxes turbotax   Items (2) and (3) can be for your spouse or a dependent meeting the requirement for that type of coverage. File 2010 taxes turbotax 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. File 2010 taxes turbotax Health coverage tax credit. File 2010 taxes turbotax   You cannot claim this credit for premiums that you pay with a tax-free distribution from your HSA. File 2010 taxes turbotax See Publication 502 for more information on this credit. File 2010 taxes turbotax Deemed distributions from HSAs. File 2010 taxes turbotax   The following situations result in deemed taxable distributions from your HSA. File 2010 taxes turbotax You engaged in any transaction prohibited by section 4975 with respect to any of your HSAs, at any time in 2013. File 2010 taxes turbotax 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. File 2010 taxes turbotax You used any portion of any of your HSAs as security for a loan at any time in 2013. File 2010 taxes turbotax You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. File 2010 taxes turbotax   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. File 2010 taxes turbotax   Any deemed distribution will not be treated as used to pay qualified medical expenses. File 2010 taxes turbotax These distributions are included in your income and are subject to the additional 20% tax, discussed later. File 2010 taxes turbotax Recordkeeping. File 2010 taxes turbotax 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. File 2010 taxes turbotax Do not send these records with your tax return. File 2010 taxes turbotax Keep them with your tax records. File 2010 taxes turbotax 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). File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. File 2010 taxes turbotax Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax You may have to pay an additional 20% tax on your taxable distribution. File 2010 taxes turbotax HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA. File 2010 taxes turbotax Additional tax. File 2010 taxes turbotax   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. File 2010 taxes turbotax Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax Exceptions. File 2010 taxes turbotax   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. File 2010 taxes turbotax Balance in an HSA An HSA is generally exempt from tax. File 2010 taxes turbotax 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. File 2010 taxes turbotax Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). File 2010 taxes turbotax Earnings on amounts in an HSA are not included in your income while held in the HSA. File 2010 taxes turbotax Death of HSA Holder You should choose a beneficiary when you set up your HSA. File 2010 taxes turbotax What happens to that HSA when you die depends on whom you designate as the beneficiary. File 2010 taxes turbotax Spouse is the designated beneficiary. File 2010 taxes turbotax   If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse's HSA after your death. File 2010 taxes turbotax Spouse is not the designated beneficiary. File 2010 taxes turbotax   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. File 2010 taxes turbotax If your estate is the beneficiary, the value is included on your final income tax return. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax You must file the form even if only your employer or your spouse's employer made contributions to the HSA. File 2010 taxes turbotax 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. File 2010 taxes turbotax Enter “statement” at the top of each Form 8889 and complete the form as instructed. File 2010 taxes turbotax Next, complete a controlling Form 8889 combining the amounts shown on each of the statement Forms 8889. File 2010 taxes turbotax Attach the statements to your tax return after the controlling Form 8889. File 2010 taxes turbotax Employer Participation This section contains the rules that employers must follow if they decide to make HSAs available to their employees. File 2010 taxes turbotax Unlike the previous discussions, “you” refers to the employer and not to the employee. File 2010 taxes turbotax Health plan. File 2010 taxes turbotax   If you want your employees to be able to have an HSA, they must have an HDHP. File 2010 taxes turbotax You can provide no additional coverage other than those exceptions listed previously under Other health coverage . File 2010 taxes turbotax Contributions. File 2010 taxes turbotax   You can make contributions to your employees' HSAs. File 2010 taxes turbotax You deduct the contributions on your business income tax return for the year in which you make the contributions. File 2010 taxes turbotax If the contribution is allocated to the prior year, you still deduct it in the year in which you made the contribution. File 2010 taxes turbotax   For more information on employer contributions, see Notice 2008-59, 2008-29 I. File 2010 taxes turbotax R. File 2010 taxes turbotax B. File 2010 taxes turbotax 123, questions 23 through 27, available at www. File 2010 taxes turbotax irs. File 2010 taxes turbotax gov/irb/2008-29_IRB/ar11. File 2010 taxes turbotax html. File 2010 taxes turbotax Comparable contributions. File 2010 taxes turbotax   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' HSAs. File 2010 taxes turbotax 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. File 2010 taxes turbotax The comparability rules do not apply to contributions made through a cafeteria plan. File 2010 taxes turbotax Comparable participating employees. File 2010 taxes turbotax   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). File 2010 taxes turbotax   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. File 2010 taxes turbotax   You will meet the notice requirement if by January 15 of the following calendar year you provide a written notice to all such employees. File 2010 taxes turbotax 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. File 2010 taxes turbotax For a sample of the notice, see Regulation 54. File 2010 taxes turbotax 4980G-4 A-14(c). File 2010 taxes turbotax 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. File 2010 taxes turbotax Note. File 2010 taxes turbotax For purposes of making contributions to HSAs of non-highly compensated employees, highly compensated employees shall not be treated as comparable participating employees. File 2010 taxes turbotax Excise tax. File 2010 taxes turbotax   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. File 2010 taxes turbotax Employment taxes. File 2010 taxes turbotax   Amounts you contribute to your employees' HSAs are generally not subject to employment taxes. File 2010 taxes turbotax You must report the contributions in box 12 of the Form W-2 you file for each employee. File 2010 taxes turbotax This includes the amounts the employee elected to contribute through a cafeteria plan. File 2010 taxes turbotax Enter code “W” in box 12. File 2010 taxes turbotax 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). File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Archer MSAs An Archer MSA is a tax-exempt trust or custodial account that you set up with a U. File 2010 taxes turbotax S. File 2010 taxes turbotax financial institution (such as a bank or an insurance company) in which you can save money exclusively for future medical expenses. File 2010 taxes turbotax What are the benefits of an Archer MSA?   You may enjoy several benefits from having an Archer MSA. File 2010 taxes turbotax You can claim a tax deduction for contributions you make even if you do not itemize your deductions on Form 1040 or Form 1040NR. File 2010 taxes turbotax The interest or other earnings on the assets in your Archer MSA are tax free. File 2010 taxes turbotax Distributions may be tax free if you pay qualified medical expenses. File 2010 taxes turbotax See Qualified medical expenses , later. File 2010 taxes turbotax The contributions remain in your Archer MSA from year to year until you use them. File 2010 taxes turbotax An Archer MSA is “portable” so it stays with you if you change employers or leave the work force. File 2010 taxes turbotax Qualifying for an Archer MSA To qualify for an Archer MSA, you must be either of the following. File 2010 taxes turbotax 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). File 2010 taxes turbotax A self-employed person (or the spouse of a self-employed person) who maintains a self-only or family HDHP. File 2010 taxes turbotax You can have no other health or Medicare coverage except what is permitted under Other health coverage , later. File 2010 taxes turbotax You must be an eligible individual on the first day of a given month to get an Archer MSA deduction for that month. File 2010 taxes turbotax If another taxpayer is entitled to claim an exemption for you, you cannot claim a deduction for an Archer MSA contribution. File 2010 taxes turbotax This is true even if the other person does not actually claim your exemption. File 2010 taxes turbotax Small employer. File 2010 taxes turbotax   A small employer is generally an employer who had an average of 50 or fewer employees during either of the last 2 calendar years. File 2010 taxes turbotax The definition of small employer is modified for new employers and growing employers. File 2010 taxes turbotax Growing employer. File 2010 taxes turbotax   A small employer may begin HDHPs and Archer MSAs for his or her employees and then grow beyond 50 employees. File 2010 taxes turbotax 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. File 2010 taxes turbotax Changing employers. File 2010 taxes turbotax   If you change employers, your Archer MSA moves with you. File 2010 taxes turbotax However, you may not make additional contributions unless you are otherwise eligible. File 2010 taxes turbotax High deductible health plan (HDHP). File 2010 taxes turbotax   To be eligible for an Archer MSA, you must be covered under an HDHP. File 2010 taxes turbotax 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. File 2010 taxes turbotax Limits. File 2010 taxes turbotax   The following table shows the limits for annual deductibles and the maximum out-of-pocket expenses for HDHPs for 2013. File 2010 taxes turbotax   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. File 2010 taxes turbotax   There are some family plans that have deductibles for both the family as a whole and for individual family members. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax Example. File 2010 taxes turbotax You have family health insurance coverage in 2013. File 2010 taxes turbotax The annual deductible for the family plan is $5,500. File 2010 taxes turbotax This plan also has an individual deductible of $2,000 for each family member. File 2010 taxes turbotax 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. File 2010 taxes turbotax Other health coverage. File 2010 taxes turbotax   You (and your spouse, if you have family coverage) generally cannot have any other health coverage that is not an HDHP. File 2010 taxes turbotax However, you can still be an eligible individual even if your spouse has non-HDHP coverage provided you are not covered by that plan. File 2010 taxes turbotax However, you can have additional insurance that provides benefits only for the following items. File 2010 taxes turbotax Liabilities incurred under workers' compensation laws, torts, or ownership or use of property. File 2010 taxes turbotax A specific disease or illness. File 2010 taxes turbotax A fixed amount per day (or other period) of hospitalization. File 2010 taxes turbotax You can also have coverage (whether provided through insurance or otherwise) for the following items. File 2010 taxes turbotax Accidents. File 2010 taxes turbotax Disability. File 2010 taxes turbotax Dental care. File 2010 taxes turbotax Vision care. File 2010 taxes turbotax Long-term care. File 2010 taxes turbotax Contributions to an MSA Contributions to an Archer MSA must be made in cash. File 2010 taxes turbotax You cannot contribute stock or other property to an Archer MSA. File 2010 taxes turbotax Who can contribute to my Archer MSA?   If you are an employee, your employer may make contributions to your Archer MSA. File 2010 taxes turbotax (You do not pay tax on these contributions. File 2010 taxes turbotax ) 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. File 2010 taxes turbotax Both you and your employer cannot make contributions to your Archer MSA in the same year. File 2010 taxes turbotax You do not have to make contributions to your Archer MSA every year. File 2010 taxes turbotax    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. File 2010 taxes turbotax Limits There are two limits on the amount you or your employer can contribute to your Archer MSA: The annual deductible limit. File 2010 taxes turbotax An income limit. File 2010 taxes turbotax Annual deductible limit. File 2010 taxes turbotax   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. File 2010 taxes turbotax You must have the HDHP all year to contribute the full amount. File 2010 taxes turbotax 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. File 2010 taxes turbotax Example 1. File 2010 taxes turbotax You have an HDHP for your family all year in 2013. File 2010 taxes turbotax The annual deductible is $5,000. File 2010 taxes turbotax You can contribute up to $3,750 ($5,000 × 75%) to your Archer MSA for the year. File 2010 taxes turbotax Example 2. File 2010 taxes turbotax You have an HDHP for your family for the entire months of July through December 2013 (6 months). File 2010 taxes turbotax The annual deductible is $5,000. File 2010 taxes turbotax You can contribute up to $1,875 ($5,000 × 75% ÷ 12 × 6) to your Archer MSA for the year. File 2010 taxes turbotax 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. File 2010 taxes turbotax The contribution limit is split equally between you unless you agree on a different division. File 2010 taxes turbotax Income limit. File 2010 taxes turbotax   You cannot contribute more than you earned for the year from the employer through whom you have your HDHP. File 2010 taxes turbotax   If you are self-employed, you cannot contribute more than your net self-employment income. File 2010 taxes turbotax This is your income from self-employment minus expenses (including the deductible part of self-employment tax). File 2010 taxes turbotax Example 1. File 2010 taxes turbotax Noah Paul earned $25,000 from ABC Company in 2013. File 2010 taxes turbotax Through ABC, he had an HDHP for his family for the entire year. File 2010 taxes turbotax The annual deductible was $5,000. File 2010 taxes turbotax He can contribute up to $3,750 to his Archer MSA (75% × $5,000). File 2010 taxes turbotax He can contribute the full amount because he earned more than $3,750 at ABC. File 2010 taxes turbotax Example 2. File 2010 taxes turbotax Westley Lawrence is self-employed. File 2010 taxes turbotax He had an HDHP for his family for the entire year in 2013. File 2010 taxes turbotax The annual deductible was $5,000. File 2010 taxes turbotax Based on the annual deductible, the maximum contribution to his Archer MSA would have been $3,750 (75% × $5,000). File 2010 taxes turbotax However, after deducting his business expenses, Joe's net self-employment income is $2,500 for the year. File 2010 taxes turbotax Therefore, he is limited to a contribution of $2,500. File 2010 taxes turbotax Individuals enrolled in Medicare. File 2010 taxes turbotax   Beginning with the first month you are enrolled in Medicare, you cannot contribute to an Archer MSA. File 2010 taxes turbotax However, you may be eligible for a Medicare Advantage MSA, discussed later. File 2010 taxes turbotax When To Contribute You can make contributions to your Archer MSA for 2013 until April 15, 2014. File 2010 taxes turbotax 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. File 2010 taxes turbotax You should include all contributions you, or your employer, made for 2013, including those made by April 15, 2014, that are designated for 2013. File 2010 taxes turbotax 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. File 2010 taxes turbotax Your employer's contributions should be shown in box 12 of Form W-2, Wage and Tax Statement, with code R. File 2010 taxes turbotax Follow the instructions for Form 8853 and complete the worksheet in the instructions. File 2010 taxes turbotax Report your Archer MSA deduction on Form 1040 or Form 1040NR. File 2010 taxes turbotax Excess contributions. File 2010 taxes turbotax   You will have excess contributions if the contributions to your Archer MSA for the year are greater than the limits discussed earlier. File 2010 taxes turbotax Excess contributions are not deductible. File 2010 taxes turbotax Excess contributions made by your employer are included in your gross income. File 2010 taxes turbotax 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. File 2010 taxes turbotax   Generally, you must pay a 6% excise tax on excess contributions. File 2010 taxes turbotax See Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, to figure the excise tax. File 2010 taxes turbotax The excise tax applies to each tax year the excess contribution remains in the account. File 2010 taxes turbotax   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. File 2010 taxes turbotax You withdraw the excess contributions by the due date, including extensions, of your tax return. File 2010 taxes turbotax 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. File 2010 taxes turbotax Deducting an excess contribution in a later year. File 2010 taxes turbotax   You may be able to deduct excess contributions for previous years that are still in your Archer MSA. File 2010 taxes turbotax The excess contribution you can deduct in the current year is the lesser of the following two amounts. File 2010 taxes turbotax Your maximum Archer MSA contribution limit for the year minus any amounts contributed to your Archer MSA for the year. File 2010 taxes turbotax The total excess contributions in your Archer MSA at the beginning of the year. File 2010 taxes turbotax   Any excess contributions remaining at the end of a tax year are subject to the excise tax. File 2010 taxes turbotax See Form 5329. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax You can receive tax-free distributions from your Archer MSA to pay for qualified medical expenses (discussed later). File 2010 taxes turbotax 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. File 2010 taxes turbotax You do not have to make withdrawals from your Archer MSA each year. File 2010 taxes turbotax If you no longer qualify to make contributions, you can still receive tax-free distributions to pay or reimburse your qualified medical expenses. File 2010 taxes turbotax A distribution is money you get from your Archer MSA. File 2010 taxes turbotax 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. File 2010 taxes turbotax Qualified medical expenses. File 2010 taxes turbotax   Qualified medical expenses are those expenses that would generally qualify for the medical and dental expenses deduction. File 2010 taxes turbotax These are explained in Publication 502. File 2010 taxes turbotax   Also, non-prescription medicines (other than insulin) are not considered qualified medical expenses for MSA purposes. File 2010 taxes turbotax 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. File 2010 taxes turbotax   Qualified medical expenses are those incurred by the following persons. File 2010 taxes turbotax You and your spouse. File 2010 taxes turbotax All dependents you claim on your tax return. File 2010 taxes turbotax 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. File 2010 taxes turbotax    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. File 2010 taxes turbotax    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. File 2010 taxes turbotax Special rules for insurance premiums. File 2010 taxes turbotax   Generally, you cannot treat insurance premiums as qualified medical expenses for Archer MSAs. File 2010 taxes turbotax 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. File 2010 taxes turbotax Health coverage tax credit. File 2010 taxes turbotax   You cannot claim this credit for premiums that you pay with a tax-free distribution from your Archer MSA. File 2010 taxes turbotax See Publication 502 for information on this credit. File 2010 taxes turbotax Deemed distributions from Archer MSAs. File 2010 taxes turbotax   The following situations result in deemed taxable distributions from your Archer MSA. File 2010 taxes turbotax You engaged in any transaction prohibited by section 4975 with respect to any of your Archer MSAs at any time in 2013. File 2010 taxes turbotax 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. File 2010 taxes turbotax You used any portion of any of your Archer MSAs as security for a loan at any time in 2013. File 2010 taxes turbotax You must include the fair market value of the assets used as security for the loan as income on Form 1040 or Form 1040NR. File 2010 taxes turbotax   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. File 2010 taxes turbotax   Any deemed distribution will not be treated as used to pay qualified medical expenses. File 2010 taxes turbotax These distributions are included in your income and are subject to the additional 20% tax, discussed later. File 2010 taxes turbotax Recordkeeping. File 2010 taxes turbotax 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. File 2010 taxes turbotax Do not send these records with your tax return. File 2010 taxes turbotax Keep them with your tax records. File 2010 taxes turbotax 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). File 2010 taxes turbotax 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. File 2010 taxes turbotax Follow the instructions for the form and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax If you do not use a distribution from your Archer MSA for qualified medical expenses, you must pay tax on the distribution. File 2010 taxes turbotax Report the amount on Form 8853 and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax You may have to pay an additional 20% tax, discussed later, on your taxable distribution. File 2010 taxes turbotax 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. File 2010 taxes turbotax Rollovers. File 2010 taxes turbotax   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. File 2010 taxes turbotax An Archer MSA and an HSA can only receive one rollover contribution during a 1-year period. File 2010 taxes turbotax See the Form 8853 instructions for more information. File 2010 taxes turbotax Additional tax. File 2010 taxes turbotax   There is a 20% additional tax on the part of your distributions not used for qualified medical expenses. File 2010 taxes turbotax Figure the tax on Form 8853 and file it with your Form 1040 or Form 1040NR. File 2010 taxes turbotax Report the additional tax in the total on Form 1040 or Form 1040NR. File 2010 taxes turbotax Exceptions. File 2010 taxes turbotax   There is no additional tax on distributions made after the date you are disabled, reach age 65, or die. File 2010 taxes turbotax Balance in an Archer MSA An Archer MSA is generally exempt from tax. File 2010 taxes turbotax 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. File 2010 taxes turbotax Amounts that remain at the end of the year are generally carried over to the next year (see Excess contributions , earlier). File 2010 taxes turbotax Earnings on amounts in an Archer MSA are not included in your income while held in the Archer MSA. File 2010 taxes turbotax Death of the Archer MSA Holder You should choose a beneficiary when you set up your Archer MSA. File 2010 taxes turbotax What happens to that Archer MSA when you die depends on whom you designate as the beneficiary. File 2010 taxes turbotax Spouse is the designated beneficiary. File 2010 taxes turbotax   If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death. File 2010 taxes turbotax Spouse is not the designated beneficiary. File 2010 taxes turbotax   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. File 2010 taxes turbotax   If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax You must file the form even if only your employer or your spouse's employer made contributions to the Archer MSA. File 2010 taxes turbotax 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. File 2010 taxes turbotax Enter “statement” at the top of each Form 8853 and complete the form as instructed. File 2010 taxes turbotax Next, complete a controlling Form 8853 combining the amounts shown on each of the statement Forms 8853. File 2010 taxes turbotax Attach the statements to your tax return after the controlling Form 8853. File 2010 taxes turbotax Employer Participation This section contains the rules that employers must follow if they decide to make Archer MSAs available to their employees. File 2010 taxes turbotax Unlike the previous discussions, “you” refers to the employer and not to the employee. File 2010 taxes turbotax Health plan. File 2010 taxes turbotax   If you want your employees to be able to have an Archer MSA, you must make an HDHP available to them. File 2010 taxes turbotax You can provide no additional coverage other than those exceptions listed previously under Other health coverage . File 2010 taxes turbotax Contributions. File 2010 taxes turbotax   You can make contributions to your employees' Archer MSAs. File 2010 taxes turbotax 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. File 2010 taxes turbotax If you are filing Form 1040, Schedule C, this is Part II, line 14. File 2010 taxes turbotax Comparable contributions. File 2010 taxes turbotax   If you decide to make contributions, you must make comparable contributions to all comparable participating employees' Archer MSAs. File 2010 taxes turbotax 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. File 2010 taxes turbotax Comparable participating employees. File 2010 taxes turbotax   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). File 2010 taxes turbotax Excise tax. File 2010 taxes turbotax   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. File 2010 taxes turbotax Employment taxes. File 2010 taxes turbotax   Amounts you contribute to your employees' Archer MSAs are generally not subject to employment taxes. File 2010 taxes turbotax You must report the contributions in box 12 of the Form W-2 you file for each employee. File 2010 taxes turbotax Enter code “R” in box 12. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax 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. File 2010 taxes turbotax The money in your account is not taxed if it is used for qualified medical expenses, and it may earn interest or dividends. File 2010 taxes turbotax An HDHP is a special health insurance policy that has a high deductible. File 2010 taxes turbotax You choose the policy you want to use as part of your Medicare Advantage MSA plan. File 2010 taxes turbotax However, the policy must be approved by the Medicare program. File 2010 taxes turbotax Medicare Advantage MSAs are administered through the federal Medicare program. File 2010 taxes turbotax You can get information by calling 1-800-Medicare (1-800-633-4227) or through the Internet at www. File 2010 taxes turbotax medicare. File 2010 taxes turbotax gov. File 2010 taxes turbotax Note. File 2010 taxes turbotax You must file Form 8853, Archer MSAs and Long-Term Care Insurance Contracts, with your tax return if you have a Medicare Advantage MSA. File 2010 taxes turbotax Flexible Spending Arrangements (FSAs) A health flexible spending arrangement (FSA) allows employees to be reimbursed for medical expenses. File 2010 taxes turbotax FSAs are usually funded through voluntary salary reduction agreements with your employer. File 2010 taxes turbotax No employment or federal income taxes are deducted from your contribution. File 2010 taxes turbotax The employer may also contribute. File 2010 taxes turbotax Note. File 2010 taxes turbotax 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. File 2010 taxes turbotax For information on the interaction between a health FSA and an HSA, see Other employee health plans under Qualifying for an HSA, earlier. File 2010 taxes turbotax What are the benefits of an FSA?   You may enjoy several benefits from having an FSA. File 2010 taxes turbotax Contributions made by your employer can be excluded from your gross income. File 2010 taxes turbotax No employment or federal income taxes are deducted from the contributions. File 2010 taxes turbotax Withdrawals may be tax free if you pay qualified medical expenses. File 2010 taxes turbotax See Qualified medical expenses , later. File 2010 taxes turbotax You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account. File 2010 taxes turbotax Qualifying for an FSA Health FSAs are employer-established benefit plans. File 2010 taxes turbotax These may be offered in conjunction with other employer-provided benefits as part of a cafeteria plan. File 2010 taxes turbotax Employers have complete flexibility to offer various combinations of benefits in designing their plan. File 2010 taxes turbotax You do not have to be covered under any other health care plan to participate. File 2010 taxes turbotax Self-employed persons are not eligible for an FSA. File 2010 taxes turbotax Certain limitations may apply if you are a highly compensated participant or a key employee. File 2010 taxes turbotax Contributions to an FSA You contribute to your FSA by electing an amount to be voluntarily withheld from your pay by your employer. File 2010 taxes turbotax This is sometimes called a salary reduction agreement. File 2010 taxes turbotax The employer may also contribute to your FSA if specified in the plan. File 2010 taxes turbotax You do not pay federal income tax or employment taxes on the salary you contribute or the amounts your employer contributes to the FSA. File 2010 taxes turbotax However, contributions made by your employer to provide coverage for long-term care insurance must be included in income. File 2010 taxes turbotax When To Contribute At the