LIVELY BLOG

Financial Health

HSAs are tax-advantaged accounts which can be part of a long-term wealth building strategy.

If you’re the owner of an HSA, sometime in May (at least by June 1st) you will receive Tax Form 5498 from the trustee or administrator of your account. You may panic, because it looks like something that you should have submitted with your income taxes. Fear not, this form is only for your informational purposes.

Tax Form 8889 is where the reporting for all of the activity on your HSA comes together and the form you’ll use to report said activity to the IRS. It’s a longer form than the others and has certain line items that could require you to complete calculations in order to arrive at the appropriate number for your situation (e.g. your maximum contribution limit and additional taxes owed).

HSAs have contribution limits set each year by the IRS. If you over-contributed to your HSA, what do you do? Well, you have a couple options. First, you can withdraw the excess contributions before Tax Day and avoid any penalties and extra paperwork. It’s important to note that simply spending the excess contributions on qualified medical expenses is not considered a withdrawal (it’s a distribution). To withdraw your contributions, contact your HSA administrator.

When you open a health savings account (HSA), it's hard to imagine your small deposit growing into a sizable stash. But routine savings paired with investing adds up faster than you may expect. And before you know it, there could be ample funds to draw from when you need them.

Lively is here to dissect the complexity of your HSA tax obligations. We will help showcase key requirements you need no matter if you this is your first year with an HSA, have multiple HSAs, or transferred your HSA to a new provider.