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Irs Forms

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Irs Forms

Irs forms 1. Irs forms   2013 Filing Requirements Table of Contents General RequirementsSelf-employed persons. Irs forms Decedents If income tax was withheld from your pay, or if you qualify for the earned income credit, the additional child tax credit, the health coverage tax credit, or the American opportunity credit, you should file a return to get a refund even if you are not otherwise required to file a return. Irs forms Do not file a federal income tax return if you do not meet the filing requirements and are not due a refund. Irs forms If you need assistance to determine if you need to file a federal income tax return for 2013, go to IRS. Irs forms gov and use the Interactive Tax Assistant (ITA). Irs forms You can find the ITA by going to IRS. Irs forms gov and entering “interactive tax assistant” in the search box. Irs forms Open the ITA and click on Do I Need to File a Tax Return under Topics by Category. Irs forms General Requirements If you are a U. Irs forms S. Irs forms citizen or resident alien, you must file a return if your gross income for the year was at least the amount shown on the appropriate line in Table 1-1. Irs forms For other filing requirements, see your tax return instructions or Publication 501, Exemptions, Standard Deduction, and Filing Information. Irs forms If you were a nonresident alien at any time during the year, the filing requirements that apply to you may be different from those that apply to U. Irs forms S. Irs forms citizens. Irs forms See Publication 519, U. Irs forms S. Irs forms Tax Guide for Aliens. Irs forms Table 1-1. Irs forms 2013 Filing Requirements Chart for Most Taxpayers Note. Irs forms You must file a return if your gross income was at least the amount shown in the last column. Irs forms IF your filing status is. Irs forms . Irs forms . Irs forms AND at the end of 2013 you were*. Irs forms . Irs forms . Irs forms THEN file a return if your gross income** was at least. Irs forms . Irs forms . Irs forms Single under 65 $10,000 65 or older $11,500 Head of household under 65 $12,850 65 or older $14,350 Married filing jointly*** under 65 (both spouses) $20,000 65 or older (one spouse) $21,200 65 or older (both spouses) $22,400 Married filing separately any age $3,900 Qualifying widow(er)  with dependent child under 65 $16,100 65 or older $17,300 * If you were born before January 2, 1949, you are considered to be 65 or older at the end of 2013. Irs forms ** Gross income means all income you receive in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Irs forms It also includes gains, but not losses, reported on Form 8949 or Schedule D. Irs forms Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. Irs forms But in figuring gross income, do not reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9. Irs forms Do not include any social security benefits unless (a) you are married filing separately and you lived with your spouse at any time in 2013 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). Irs forms If (a) or (b) applies, see the Instructions for Form 1040 or Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to figure the taxable part of social security benefits you must include in gross income. Irs forms *** If you did not live with your spouse at the end of 2013 (or on the date your spouse died) and your gross income was at least $3,900, you must file a return regardless of your age. Irs forms Gross income. Irs forms   Gross income is all income you receive in the form of money, goods, property, and services that is not exempt from tax. Irs forms If you are married and live with your spouse in a community property state, half of any income defined by state law as community income may be considered yours. Irs forms The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Irs forms A registered domestic partner in Nevada, Washington, or California generally must report half the combined community income of the individual and his or her domestic partner. Irs forms For more information about community property, see Publication 555, Community Property. Irs forms   For more information on what to include in gross income, see chapter 2. Irs forms Self-employed persons. Irs forms    If you are self-employed in a business that provides services (where the production, purchase, or sale of merchandise is not an income-producing factor), gross income from that business is the gross receipts. Irs forms   If you are self-employed in a business involving manufacturing, merchandising, or mining, gross income from that business is the total sales minus the cost of goods sold. Irs forms Then, to this figure, you add any income from investments and from incidental or outside operations or sources. Irs forms See Publication 334, Tax Guide for Small Business, for more information. Irs forms Dependents. Irs forms   If you could be claimed as a dependent by another taxpayer (that is, you meet the dependency tests in Publication 501), special filing requirements apply. Irs forms See Publication 501. Irs forms Decedents A personal representative of a decedent's estate can be an executor, administrator, or anyone who is in charge of the decedent's property. Irs forms If you are acting as the personal representative of a person who died during the year, you may have to file a final return for that decedent. Irs forms You also have other duties, such as notifying the IRS that you are acting as the personal representative. Irs forms Form 56, Notice Concerning Fiduciary Relationship, is available for this purpose. Irs forms When you file a return for the decedent, either as the personal representative or as the surviving spouse, you should write “DECEASED,” the decedent's name, and the date of death across the top of the tax return. Irs forms If no personal representative has been appointed by the due date for filing the return, the surviving spouse (on a joint return) should sign the return and write in the signature area “Filing as surviving spouse. Irs forms ” For more information, see Publication 559, Survivors, Executors, and Administrators. Irs forms Surviving spouse. Irs forms   If you are the surviving spouse, the year your spouse died is the last year for which you can file a joint return with that spouse. Irs forms After that, if you do not remarry, you must file as a qualifying widow(er) with dependent child, head of household, or single. Irs forms For more information about each of these filing statuses, see Publication 501. Irs forms   If you remarry before the end of the year in which your spouse died, a final joint return with the deceased spouse cannot be filed. Irs forms You can, however, file a joint return with your new spouse. Irs forms In that case, the filing status of your deceased spouse for his or her final return is married filing separately. Irs forms The level of income that requires you to file an income tax return changes when your filing status changes (see Table 1-1). Irs forms Even if you and your deceased spouse were not required to file a return for several years, you may have to file a return for tax years after the year of death. Irs forms For example, if your filing status changes from filing jointly in 2012 to single in 2013 because of the death of your spouse, and your gross income is $17,500 for both years, you must file a return for 2013 even though you did not have to file a return for 2012. Irs forms Prev  Up  Next   Home   More Online Publications
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Understanding Your CP232A Notice

We approved your request for an extension to file your Form 5330.


What you need to do

  • Keep this notice for your records.
  • File your required form by your new due date shown on the notice.

You may want to


Answers to Common Questions

Q. Where can I go for more information about Employee Benefit Plans?

A. For more information on Employee Benefit Plans, see Retirement Plans Community.

Q. Can I get help over the phone?

A. If you have questions and/or need help, please call 1-877-829-5500. Personal assistance is available Monday through Friday, 7:00 a.m. to 7:00 p.m. CT.

 


Tips for next year

Be sure to mail your Form 5558 on or before the due date of your return.

Page Last Reviewed or Updated: 27-Jan-2014

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Irs Forms

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