5 Reminders About Your HSA and Taxes

By now, you likely know that you save on taxes three ways when you have a Health Savings Account (HSA):

  • No taxes on contributions.
  • No taxes on eligible withdrawals.
  • No taxes on interest your account earns.

But how will this affect your annual income taxes? Begin with these five tax season reminders about your HSA. If you have additional questions, consider connecting with a tax advisor who can help you navigate the ins and outs of your HSA and taxes. 

1. The contribution deadline is the same deadline as the one for filing your taxes. That means that you can make contributions for the 2021 tax year through April 18, 2022. And because you pay no taxes on contributions, your annual taxable income could be lower if you continue to contribute up to April 18. However, these contributions must be made through HSA Bank.

2. There are three forms associated with filing taxes for your HSA: IRS Form 1099-SA, IRS Form 5498-SA and IRS Form 8889. 

  • IRS Form 1099-SA shows the amount of money you spent from your HSA during the tax year. Use the information in this form to fill out IRS tax Form 8889.
  • IRS Form 5498-SA shows the amount of money deposited into your HSA for the tax year.
  • IRS Form 8889 is the form you or your accountant prepare on your behalf. 

How you receive forms depends on what you selected when you opened your HSA Bank account. Read the HSA Bank FAQs to learn more. 

3. Any contributions from Hitachi Vantara are reported on your W-2 and included as part of the total account contributions listed on Form 5498-SA. 

4. If any of your contributions exceed the IRS annual maximums, they must be removed by the tax filing deadline. If they’re not removed, you can incur tax penalties or IRS fees. There are additional rules surrounding excess contribution removals; if you’re in this situation, read the HSA Bank FAQs to learn more about how excess contribution removals work.  

5. Each state can decide to follow the federal tax guidelines for HSAs or establish its own. Consult with your tax advisor regarding your state’s rules, or visit your state’s Department of Revenue office for more information. Be aware that if you reside in California or New Jersey, both states tax your HSA contributions. 

To learn more about the HSA, visit benefits.hitachivantara.com and hsabank.com