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Free prior year tax software 12. Free prior year tax software   How To Get Tax Help Table of Contents Whether it's help with a tax issue, preparing your tax return or a need for a free publication or form, get the help you need the way you want it: online, use a smart phone, call or walk in to an IRS office or volunteer site near you. Free prior year tax software Free help with your tax return. Free prior year tax software   You can get free help preparing your return nationwide from IRS-certified volunteers. Free prior year tax software The Volunteer Income Tax Assistance (VITA) program helps low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers. Free prior year tax software The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free prior year tax software Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. Free prior year tax software In addition, some VITA and TCE sites provide taxpayers the opportunity to prepare their own return with help from an IRS-certified volunteer. Free prior year tax software To find the nearest VITA or TCE site, you can use the VITA Locator Tool on IRS. Free prior year tax software gov, download the IRS2Go app, or call 1-800-906-9887. Free prior year tax software   As part of the TCE program, AARP offers the Tax-Aide counseling program. Free prior year tax software To find the nearest AARP Tax-Aide site, visit AARP's website at www. Free prior year tax software aarp. Free prior year tax software org/money/taxaide or call 1-888-227-7669. Free prior year tax software For more information on these programs, go to IRS. Free prior year tax software gov and enter “VITA” in the search box. Free prior year tax software Internet. Free prior year tax software    IRS. Free prior year tax software gov and IRS2Go are ready when you are —24 hours a day, 7 days a week. Free prior year tax software Download the free IRS2Go app from the iTunes app store or from Google Play. Free prior year tax software Use it to check your refund status, order transcripts of your tax returns or tax account, watch the IRS YouTube channel, get IRS news as soon as it's released to the public, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. Free prior year tax software Check the status of your 2013 refund with the Where's My Refund? application on IRS. Free prior year tax software gov or download the IRS2Go app and select the Refund Status option. Free prior year tax software The IRS issues more than 9 out of 10 refunds in less than 21 days. Free prior year tax software Using these applications, you can start checking on the status of your return within 24 hours after we receive your e-filed return or 4 weeks after you mail a paper return. Free prior year tax software You will also be given a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free prior year tax software The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free prior year tax software Use the Interactive Tax Assistant (ITA) to research your tax questions. Free prior year tax software No need to wait on the phone or stand in line. Free prior year tax software The ITA is available 24 hours a day, 7 days a week, and provides you with a variety of tax information related to general filing topics, deductions, credits, and income. Free prior year tax software When you reach the response screen, you can print the entire interview and the final response for your records. Free prior year tax software New subject areas are added on a regular basis. Free prior year tax software  Answers not provided through ITA may be found in Tax Trails, one of the Tax Topics on IRS. Free prior year tax software gov which contain general individual and business tax information or by searching the IRS Tax Map, which includes an international subject index. Free prior year tax software You can use the IRS Tax Map, to search publications and instructions by topic or keyword. Free prior year tax software The IRS Tax Map integrates forms and publications into one research tool and provides single-point access to tax law information by subject. 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Free prior year tax software Determine if you are eligible for the EITC and estimate the amount of the credit with the Earned Income Tax Credit (EITC) Assistant. Free prior year tax software Visit Understanding Your IRS Notice or Letter to get answers to questions about a notice or letter you received from the IRS. Free prior year tax software If you received the First Time Homebuyer Credit, you can use the First Time Homebuyer Credit Account Look-up tool for information on your repayments and account balance. Free prior year tax software Check the status of your amended return using Where's My Amended Return? Go to IRS. Free prior year tax software gov and enter Where's My Amended Return? in the search box. Free prior year tax software You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free prior year tax software It can take up to 3 weeks from the date you mailed it to show up in our system. 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Free prior year tax software Request an Electronic Filing PIN by going to IRS. Free prior year tax software gov and entering Electronic Filing PIN in the search box. Free prior year tax software Download forms, instructions and publications, including accessible versions for people with disabilities. Free prior year tax software Locate the nearest Taxpayer Assistance Center (TAC) using the Office Locator tool on IRS. Free prior year tax software gov, or choose the Contact Us option on the IRS2Go app and search Local Offices. Free prior year tax software An employee can answer questions about your tax account or help you set up a payment plan. Free prior year tax software Before you visit, check the Office Locator on IRS. Free prior year tax software gov, or Local Offices under Contact Us on IRS2Go to confirm the address, phone number, days and hours of operation, and the services provided. Free prior year tax software If you have a special need, such as a disability, you can request an appointment. Free prior year tax software Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. Free prior year tax software Apply for an Employer Identification Number (EIN). Free prior year tax software Go to IRS. Free prior year tax software gov and enter Apply for an EIN in the search box. Free prior year tax software Read the Internal Revenue Code, regulations, or other official guidance. Free prior year tax software Read Internal Revenue Bulletins. Free prior year tax software Sign up to receive local and national tax news and more by email. Free prior year tax software Just click on “subscriptions” above the search box on IRS. Free prior year tax software gov and choose from a variety of options. Free prior year tax software Phone. Free prior year tax software    You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. Free prior year tax software Download the free IRS2Go app from the iTunes app store or from Google Play. Free prior year tax software Call to locate the nearest volunteer help site, 1-800-906-9887 or you can use the VITA Locator Tool on IRS. Free prior year tax software gov, or download the IRS2Go app. Free prior year tax software Low-to-moderate income, elderly, people with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. Free prior year tax software The Tax Counseling for the Elderly (TCE) program helps taxpayers age 60 and older with their tax returns. Free prior year tax software Most VITA and TCE sites offer free electronic filing. Free prior year tax software Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. Free prior year tax software Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. Free prior year tax software Call the automated Where's My Refund? information hotline to check the status of your 2013 refund 24 hours a day, 7 days a week at 1-800-829-1954. Free prior year tax software If you e-file, you can start checking on the status of your return within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. Free prior year tax software The IRS issues more than 9 out of 10 refunds in less than 21 days. Free prior year tax software Where's My Refund? will give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. Free prior year tax software Before you call this automated hotline, have your 2013 tax return handy so you can enter your social security number, your filing status, and the exact whole dollar amount of your refund. Free prior year tax software The IRS updates Where's My Refund? every 24 hours, usually overnight, so you only need to check once a day. Free prior year tax software Note, the above information is for our automated hotline. Free prior year tax software Our live phone and walk-in assistors can research the status of your refund only if it's been 21 days or more since you filed electronically or more than 6 weeks since you mailed your paper return. Free prior year tax software Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. Free prior year tax software You can generally expect your amended return to be processed up to 12 weeks from the date we receive it. Free prior year tax software It can take up to 3 weeks from the date you mailed it to show up in our system. Free prior year tax software Call 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions, publications, and prior-year forms and instructions (limited to 5 years). Free prior year tax software You should receive your order within 10 business days. Free prior year tax software Call TeleTax, 1-800-829-4477, to listen to pre-recorded messages covering general and business tax information. Free prior year tax software If, between January and April 15, you still have questions about the Form 1040, 1040A, or 1040EZ (like filing requirements, dependents, credits, Schedule D, pensions and IRAs or self-employment taxes), call 1-800-829-1040. Free prior year tax software Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. Free prior year tax software The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. Free prior year tax software These individuals can also contact the IRS through relay services such as the Federal Relay Service. Free prior year tax software Walk-in. Free prior year tax software   You can find a selection of forms, publications and services — in-person. Free prior year tax software Products. Free prior year tax software You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. Free prior year tax software Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. Free prior year tax software Services. Free prior year tax software You can walk in to your local TAC for face-to-face tax help. Free prior year tax software An employee can answer questions about your tax account or help you set up a payment plan. Free prior year tax software Before visiting, use the Office Locator tool on IRS. Free prior year tax software gov, or choose the Contact Us option on the IRS2Go app and search Local Offices for days and hours of operation, and services provided. Free prior year tax software Mail. Free prior year tax software   You can send your order for forms, instructions, and publications to the address below. Free prior year tax software You should receive a response within 10 business days after your request is received. Free prior year tax software Internal Revenue Service 1201 N. Free prior year tax software Mitsubishi Motorway Bloomington, IL 61705-6613    The Taxpayer Advocate Service Is Here to Help You. Free prior year tax software The Taxpayer Advocate Service (TAS) is your voice at the IRS. Free prior year tax software Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. Free prior year tax software   What can TAS do for you? We can offer you free help with IRS problems that you can't resolve on your own. Free prior year tax software We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. Free prior year tax software You face (or your business is facing) an immediate threat of adverse action. Free prior year tax software You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. Free prior year tax software   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. Free prior year tax software Here's why we can help: TAS is an independent organization within the IRS. Free prior year tax software Our advocates know how to work with the IRS. Free prior year tax software Our services are free and tailored to meet your needs. Free prior year tax software We have offices in every state, the District of Columbia, and Puerto Rico. Free prior year tax software   How can you reach us? If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. Free prior year tax software irs. Free prior year tax software gov/Advocate, or call us toll-free at 1-877-777-4778. Free prior year tax software   How else does TAS help taxpayers?  TAS also works to resolve large-scale, systemic problems that affect many taxpayers. Free prior year tax software If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System. Free prior year tax software Low Income Taxpayer Clinics. Free prior year tax software   Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. Free prior year tax software Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Free prior year tax software Visit www. Free prior year tax software irs. Free prior year tax software gov/Advocate or see IRS Publication 4134, Low Income Taxpayer Clinic List. Free prior year tax software Prev  Up  Next   Home   More Online Publications
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Whenever You Take Your Car in for Repairs:

  • Choose a reliable repair shop. Family, friends or an independent consumer rating organization should be able to help you. Look for shops that display various certifications that are current. You should also check out the shop's record with your local consumer protection office or Better Business Bureau.
  • Describe the symptoms. Don't try to diagnose the problem.
  • Make it clear that work cannot begin until you have a written estimate and you give your okay. . Never sign a blank repair order. If the problem can't be diagnosed on the spot, insist that the shop contact you for authorization once the trouble has been found.
  • Ask the shop to keep the old parts for you.
  • If a repair is covered under warranty, follow the warranty instructions..
  • Get all repair warranties in writing.
  • Keep copies of all paperwork.

Some states, cities and counties have special laws that deal with auto repairs. For information on the laws in your state, contact your state or local consumer protection office. In addition, the FTC provides a complete consumer guide to auto repair.

The Free Prior Year Tax Software

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