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Form 5498 - SA (HSA account question)

swongtax
Level 4

Hello All,

Can someone please help me clarify this question?

On Form 5498-SA Box 2 -  Total contributions made in 2020

Is the amount in Box 2 Employee contribution? And if so, do I need to enter this amount manually on Form 8889 Line 2 (HSA contribution made by employee) even if the contributions are made through payroll deductions?

What I don't understand is if the employee contributed to his HSA through payroll deductions, which is pre-tax, why would this contribution show up on Form 5498-SA and I would still need to enter it on Form 8889 in order to have it deducted from taxable income?  Isn't this making this amount pre-tax twice?

Thank you !!!

Sui

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Just-Lisa-Now-
Level 15
Level 15

You shouldn't really need to enter anything into the 8889 unless you made contributions outside of payroll.

You do however need to mark the Self or Family box in that Line 3 Smart Worksheet at the top of the form or you end up going own a rabbit hole with errors trying to make that form happy.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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swongtax
Level 4

Trying to answer my own question here:

I remember from some reading somewhere that Form 5498-SA Box 2 is a combined amount contributed by both the Employer and Employee through Payroll deductions and this amount is already pre-tax and does not need to be entered in Form 8889 Line 2.

I also believe that it is only when Employees made contributions from outside of payrolls then the amount is needed to be entered on Form 8889 Line, in order to deduct it from taxable income.


Can someone confirm that this is correct?

 

Thank you !

 

Sui

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Just-Lisa-Now-
Level 15
Level 15

You shouldn't really need to enter anything into the 8889 unless you made contributions outside of payroll.

You do however need to mark the Self or Family box in that Line 3 Smart Worksheet at the top of the form or you end up going own a rabbit hole with errors trying to make that form happy.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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qbteachmt
Level 15

5498 represents money In. Not how it got there. You never enter 5498 into a tax return, but you can use it for reference.

The W2 should already include the deductions and the appropriate tax treatment.

 

"Who Must File

You must file Form 8889 if any of the following applies.

  • You (or someone on your behalf, including your employer) made contributions for 2020 to your HSA.

  • You received HSA distributions in 2020.

  • You must include certain amounts in income because you failed to be an eligible individual during the testing period.

  • You acquired an interest in an HSA because of the death of the account beneficiary. See Death of Account Beneficiary, later.

If you (or your spouse, if filing jointly) received HSA distributions in 2020, you must file Form 8889 with Form 1040, Form 1040-SR, or Form 1040-NR, even if you have no taxable income or any other reason for filing Form 1040, Form 1040-SR, or Form 1040-NR..

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