What is an IRS Form 5498-SA? HSA & MSA Tax Form

03 Apr What is an IRS Form 5498-SA? HSA & MSA Tax Form

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For 2024, the limits are $4,150 for individuals and $8,300 for families. Box 2 reflects contributions to Archer MSAs, ensuring compliance with plan-specific limits. Box 4 provides the fair market value of the account at year-end, which can aid in financial planning.

Free up time in your firm all year by contracting monthly bookkeeping tasks to our platform. If you go all the way through the HSA interview (do a Search for hsa and click on the jump-to link), you will see a screen with the heading “Let’s enter name’s HSA contributions”. Whether you already have an HSA or are considering opening one, understanding IRS Form 5498-SA is crucial to ensure you meet your tax obligations and take full advantage of the benefits of an HSA. Let’s dive deeper into this essential form and gain a comprehensive understanding of its purpose and usage.

One key aspect of understanding Form 5498-SA is knowing the parties involved. The HSA trustee or custodian is responsible for issuing the form, while the account holder is the individual who contributes to the HSA and manages the account. The IRS receives a copy of the form to ensure compliance with tax regulations.

It is important for IRA owners to review their Form 5498 and Form 5498-SA each year to ensure that the information is accurate. If there are any errors or discrepancies, the account holder should contact their financial institution to have the information corrected. The taxpayer must file Form 5498-SA for each person for whom they’ve maintained an HSA, Archer MSA, or MA MSA. Form 5498-SA is available to trustees online via the IRS website and can be filed electronically. Lacerte doesn’t have direct inputs for each of these boxes, but the form often provides valuable information for completing your client’s return.

IRS Form 5498 in general

When it comes to tracking qualified medical expenses, it is crucial to keep detailed records and documentation. These documents should clearly indicate the nature of the expense, the date it was incurred, and the amount paid. It’s also important to note that individuals should not rely solely on Form 5498-SA to track qualified medical expenses. While the form provides a summary of the distributions made from the HSA, it does not provide an itemized breakdown of the expenses.

Follow these steps to enter 5498-SA, boxes 2 and 3:

You must report the receipt of a rollover from one Archer MSA to another Archer MSA, and the receipt of a rollover from an Archer MSA or an HSA to an HSA in box 4. As mentioned earlier, the 2024 Form 5498 filing deadline is May 31, 2025. It is by this date Form 5498 must be sent to the IRS and to IRA owners and beneficiaries. When you use Taxfyle, you’re guaranteed an affordable, licensed Professional. Taxfyle connects you to a licensed CPA or EA who can take time-consuming bookkeeping work off your hands.

For Medical Savings Account MSA:

  • However, it’s important to note that the specific deadline may vary depending on the tax year and any extensions granted by the IRS.
  • Form 5498 is prepared for IRA owners, and after an IRA owner’s death, for IRA beneficiaries.
  • The IRS’s 2024 Instructions for Forms 1099-R and 5498 provide the necessary details to ensure proper and timely IRA contribution reporting.
  • Form 1099-SA is of particular importance because participants use information from that document to report any distributions they received from an HSA, Archer MSA or MA MSA to the IRS.

For specific instructions regarding electronic reporting to the IRS, see Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W2-G. With Taxfyle, your firm can access form 5498-sa turbotax licensed CPAs and EAs who can prepare and review tax returns for your clients. Implement our API within your platform to provide your clients with accounting services. TaxBandits allows you to distribute your recipient copies via postal mail or through an online access secure portal. We ensure that your completed 5498,5498-SA and 5498-ESA Forms adhere to IRS business rules, ensuring accurate filing.

  • TaxBandits supports the following 5498 Forms that must be filed with the IRS.
  • For reporting purposes, contributions and rollovers do not include transfers.
  • IRS Form 5498-SA is a document used to report information related to contributions, distributions, and the fair market value (FMV) of assets held in a Health Savings Account (HSA).
  • Alternatively, individuals can make contributions on their own, separate from their employment.

Form 5498-SA contains important information that helps individuals and the IRS track contributions made to an HSA, the FMV of the account, and any distributions taken during the tax year. This information is necessary for calculating taxes and ensuring that HSA funds are being used appropriately. Box 4 reports any contributions for the current year that were rolled over from another qualifying savings account. This amount, along with distributions from the original account reported on Form 1099-SA, can help you accurately complete Form 8853 or Form 8889. @al126 You don’t need to enter your ABLE contributions, as they are not tax-deductible.

Overall, understanding IRS Form 5498-SA is essential for maintaining accurate records, ensuring tax compliance, and maximizing the benefits of an HSA. By providing detailed information about contributions, distributions, and the FMV of assets, this form allows individuals and the IRS to monitor the use and growth of HSA funds effectively. IRS Form 5498-SA is a document of importance to anyone who participates in or manages a health savings account (HSA), Archer Medical Savings Account (MSA) or Medicare Advantage (MA MSA). Each year, account trustees must provide copies of the form to both the IRS and the participating employees. Medicare Advantage MSAs are available to those enrolled in high-deductible Medicare Advantage Plans.

Form 5498’s title is IRA Contribution Information, and it’s usually sent by your IRA trustee to report your IRA activity to the IRS. These amounts were already included in box 1, and don’t need to be re-entered. That’s three separate amounts being entered in one box on the 5498-SA. So no wonder it is difficult to match this with any single form for 2023. In the year an HSA, Archer MSA, or MA MSA owner dies, you must generally file a Form 5498-SA and furnish a statement for the decedent. If the designated beneficiary is the surviving spouse, the following apply.

Do I Need to Report Form 5498-SA on My Tax Return?

When loading my contribution to the HSA in addition to this former employer contribution, I do not see this contribution in turbo tax, only a spot for my personal contribution. However, the IRS uses it to verify the contributions to your IRA, so any inconsistencies between your tax return and what’s reported on Form 5498 could trigger a letter from the IRS. TaxBandits, as an authorized e-file service provider, can help you easily file 5498, 5498-SA, and 5498-ESA forms, ensuring tax compliance. You can e-file your 5498 forms in minutes by creating a free TaxBandits account and transmitting your forms to the IRS. I am asked to review my information, verify I only spent distributions on medical expenses, etc.  There is not a screen that prompts for HSA contributions.

This documentation is critical in case of an audit or in circumstances where proof of medical expenses is required. Archer MSAs, governed by Internal Revenue Code Section 220, are tailored for self-employed individuals and small businesses. Though less common since the introduction of HSAs, they still provide tax-preferred savings. For 2023, contribution limits are 65% of the health plan deductible for individuals and 75% for families. Contributions are tax-deductible, and distributions for qualified medical expenses are tax-free.

According to Investopedia, Form 5498 details all contributions made to your Individual Retirement Account (IRA), including traditional, Roth, SEP, and SIMPLE IRAs. This ensures accurate tracking of your retirement savings and helps the IRS verify that contributions do not exceed annual limits. In this guide, we’ll break down everything you need to know about Form 5498, why it matters for your retirement planning, and how it affects your tax filing for 2025. They are typically tax-deductible, meaning they can reduce an individual’s taxable income for the year. Additionally, the earnings on HSA contributions grow tax-free, allowing individuals to potentially accumulate more funds for future medical expenses.

All information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction. The content on this website is provided “as is;” no representations are made that the content is error-free. Finding an accountant to manage your bookkeeping and file taxes is a big decision.

Further Reading: Learn how to maximize tax-free retirement savings with smart insurance strategies

This allows for easy organization, accessibility, and retrieval of information when needed for tax purposes or IRS audits. Refer to the IRS Instructions for Form 8853 and the Instructions for Form 8889 for information on entering Form 5498-SA, box 4. Employee contributions to an HSA or an Archer MSA reduce taxable income. Form 5498-SA summarizes these contributions, but has no direct impact on taxability.