What is tax form 1099-SA?

IRS form 1099-SA reports distributions from health savings accounts (HSAs) and medical savings accounts (MSAs). Distributions are accounted for whether they have been paid directly to the provider or to the account holder in compensation for out-of-pocket medical expenses. Allowed Medical Expenses When distributions have been used for allowed medical expenses, no tax penalty is […]

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2018 HSA contribution limit

IRS form 1099-SA reports distributions from health savings accounts (HSAs) and medical savings accounts (MSAs). Distributions are accounted for whether they have been paid directly to the provider or to the account holder in compensation for out-of-pocket medical expenses.

Allowed Medical Expenses

When distributions have been used for allowed medical expenses, no tax penalty is incurred and the amount of distribution is simply recorded. Keeping careful records of HSA fund usage throughout the year can be helpful to ensure that money is spent on qualified charges.

Ineligible Expenses

Occasionally, there may be accidental use of HSA or MSA funds on ineligible expenses. While those expenses may, in fact, be medical in nature, they may not be covered due to specific coverage exclusions. Be sure to check the allowed/disallowed list to use HSA funds appropriately. Funds used on ineligible expenses may incur an income tax penalty.

Final Tip

Proper and thorough documentation of medical expenses is key to successfully filling out IRS form 1099-SA. Be sure to check with a tax professional with any specific concerns or questions.

Helpful Links

List of Qualified Medical Expenses – HSA Center

Form 1099-SA Explanation – Turbo Tax

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