Instructions for Filling Out Form 8889

Instructions for Filling Out Form 8889

Written by 
Pilot Team
January 10, 2023
Instructions for Filling Out Form 8889

This document offers a comprehensive guide on completing Form 8889 for reporting Health Savings Accounts (HSAs) contributions, calculating the HSA deduction, and handling distributions from HSAs, including potential tax implications for ineligible individuals.

What is Form 8889?

Form 8889 is a tax form used to report Health Savings Account (HSA) contributions, figure HSA deductions, report distributions from HSAs, and calculate amounts to be included in income and additional tax if the account beneficiary fails to be an eligible individual. The purpose of this form is to ensure proper reporting of HSA activity, including contributions, deductions, and distributions. Key aspects of Form 8889 include maximum contribution limits based on the type of high-deductible health plan (HDHP) coverage, the exclusion of distributions used for qualified medical expenses from gross income, and potential additional taxes for ineligible individuals or excess contributions.

Who Must File Form 8889?

Individuals who need to file Form 8889 include those who made contributions to an HSA in 2023 (including contributions made on their behalf and employer contributions), received HSA distributions in 2023, must include certain amounts in income due to failing to be an eligible individual during the testing period, or acquired an interest in an HSA as a result of the death of the account beneficiary.

Form 8889 Tax Filing Deadlines and Due Dates

  • Form 8889 is typically due on the same date as the individual's federal income tax return, which is usually April 15th of the following year.
  • Contributions for 2023 made in 2024 can be included if they are made by the unextended deadline for filing the 2023 federal income tax return, which is typically April 15, 2024.
  • If an individual receives an extension to file their federal income tax return, the due date for Form 8889 will also be extended.

Form 8889 Late Payment Penalty

There’s no specific penalty, though it is important to note that this form is typically filed alongside an individual's federal income tax return. Therefore, any late payment penalties associated with the federal income tax return would also apply to Form 8889. To avoid potential penalties, it is crucial to file Form 8889 and the accompanying tax return by the due date, which is usually April 15th of the following year.

Step-by-Step Instructions for Form 8889

The step-by-step instructions for filling out Form 8889 are as follows:

  1. Enter your name and social security number.
  2. Indicate the type of HDHP coverage you have.
  3. Calculate your HSA contribution limit for the year.
  4. Enter the total contributions made to your HSA for the year.
  5. Calculate your HSA deduction.
  6. Determine any excess contributions you made.
  7. Report any distributions you received from your HSA.
  8. Determine the amount of the distribution used for qualified medical expenses.
  9. Calculate any additional tax for distributions not used for qualified medical expenses.
  10. Report any income and additional tax for failure to maintain HDHP coverage.

How to Submit Form 8889

To submit Form 8889, first complete the form by following the detailed instructions provided by the Internal Revenue Service (IRS). Next, attach the completed form to your tax return. Finally, submit your tax return by the due date.

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