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View Diary: "Modern insurance" and my 20% "additional tax" from Pres. Obama (12 comments)

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  •  Take a look at this information: (2+ / 0-)
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    Adam AZ, Eyesbright

    http://healthinsurance.about.com/...

    Reporting Distributions on Your Return

    How you report your distributions depends on whether or not you use the distribution for qualified medical expenses (defined earlier).

    If you use a distribution from your HSA for qualified medical expenses, you do not pay tax on the distribution but you have to report the distribution on Form 8889. However, the distribution of an excess contribution taken out after the due date, including extensions, of your return is subject to tax even if used for qualified medical expenses. Follow the instructions for the form and file it with your Form 1040 or Form 1040NR.

    If you do not use a distribution from your HSA for qualified medical expenses, you must pay tax on the distribution. Report the amount on Form 8889 and file it with your Form 1040 or Form 1040NR. If you have a taxable HSA distribution, include it in the total on Form 1040 or Form 1040NR, line 21, and enter “HSA” and the amount on the dotted line next to line 21. You may have to pay an additional 20% tax on your taxable distribution.

    HSA administration and maintenance fees withdrawn by the trustee are not reported as distributions from the HSA.

    Additional tax.   There is an additional 20% tax on the part of your distributions not used for qualified medical expenses. Figure the tax on Form 8889 and file it with your Form 1040 or Form 1040NR. Report the additional tax in the total on Form 1040, line 60, or Form 1040NR, line 59, and enter “HSA” and the amount on the dotted line next to that line.

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