If you contribute to your HSA with after-tax dollars, you may deduct the contribution amount, subject to the maximum annual contribution limits from your taxes at filing time. Above the line means you will reduce your taxable income regardless of whether you itemize or use the standard deduction on your income tax form.

For 2018, the maximum contributions to your HSA, including any made by your employer to your account, are $3,450 for individual coverage and $6,900 if you have family coverage.

For 2019, the maximum contributions to your HSA, including any made by your employer to your account, are $3,500 for individual coverage and $7,000 if you have family coverage. If you turn age 55 or older, you may add up to $1,000 more as a "catch-up" contribution.

These amounts apply as long as you enroll in qualified HDHP coverage before the first day of December and as long as you continue to maintain qualified HDHP coverage for the next 12 months.

These maximum contribution limits are determined annually.

There are no tax penalties for closing your HSA. However, if you use HSA funds for other than qualified medical expenses, those distributions will be subject to ordinary income tax, and in some cases, a 20% penalty.You may close your account without incurring tax penalties as long as you:

1. Use the funds in your account for qualified medical expenses
2. Transfer your funds to another HSA custodian
3. Transfer your funds to another HSA custodian

The 20% penalty will be assessed for the year in which you take the distribution for non-qualified expenses. The penalty will be due and payable when you file your annual tax return.

Distributions from your HSA that are used exclusively to pay for qualified medical expenses for you, your spouse or dependents are excludable from your gross income. Your HSA funds can be used for qualified expenses and will continue to be free from federal income tax and states taxes (for most states) even if you are not currently eligible to contribute to your HSA.

If you take a non-qualified distribution, you are subject to ordinary income tax and a 20% penalty tax. If you are age 65 or older, disabled or for the year in which you die, the 20% penalty may not apply.

If you are no longer eligible to contribute because you are enrolled in Medicare benefits, or are no longer covered by a qualified HDHP, distributions used exclusively to pay for qualified medical expenses continue to be free from federal income tax and state taxes (for most states).

You need to be aware of the following three HSA-related tax forms. (Please note, not all forms need to be attached to the tax return when it is filed.):

Tax Form 5498-SA: This form reports contributions made to your HSA by you or by an eligible individual on your behalf, as well as contributions made by your employer, if applicable. The IRS requires the HSA custodian to issue Form 5498-SA to every member who had any contribution activity in their HSA during the previous tax year. Form 5498-SA reports the Fair Market Value of an account, so you will get this form if your account has a Fair Market Value regardless if any contributions were made to the account in the last year. You can access this form online by accessing your HSA; selecting "Tax Forms" from the "Member Services" tab or the "Quick Links" menu, making sure to select the year for which the form is needed. You can access forms online for the prior three years.

Note: If you make a prior year (2017) contribution by April 17, 2018 you will receive an amended Form 5498-SA in May 2018.

Tax Form 1099-SA: This form reports distributions made from your HSA. The IRS requires the HSA custodian to issue Form 1099-SA if you took a distribution from your HSA during the previous tax year. You can also access this form by logging into the HSA; selecting "Tax Forms" from the "Member Services" tab or the "Quick Links" menu making sure to select the year for which the form is needed. You can access forms online for the prior three years.

IRS Form 8889: You must obtain, complete and file IRS Form 8889 as part of the federal tax filing unless you received a filing extension. This form can be downloaded from the IRS website, or at: http://www.irs.gov/pub/irs-pdf/f8889.pdf

Note: If both you and your spouse have an HSA, you must file two IRS Form 8889s (one for each account).

All the dollars in your HSA, including earnings generated on those dollars, are completely free of federal income tax and state taxes (for most states) while in your account. You may have the option of selecting your own investment option(s) for savings above the minimum balance required for your transactional (checking) account.

The only time tax is ever owed on principal or interest distributed from your HSA is if the money is distributed for non-qualified expenses. If you use the funds for non-qualified expenses after you are 65 or disabled, you will only be subject to tax on the money you withdraw without the 20% penalty.

Contributions, investment earnings, and distributions for qualified medical expenses are exempt from federal income tax, FICA (Social Security and Medicare) tax and state income taxes (for most states).

If a family member or anyone else makes a contribution to your HSA, the tax advantages apply to you and not the person making the contribution. You may deduct the contribution amount when filing your annual income taxes, in the same way you would if you had deposited the post-tax contribution on your own. All contributions to the account are combined and subject to maximum annual contribution limits.

This does not include any contributions made to your account by your employer. You do not take any deductions for contributions made by your employer; rather employer contributions are excludable from income for federal income tax purposes and for most state income tax purposes.

Your HSA must be established before qualified medical expenses are incurred to receive distributions or reimbursements free from federal income tax and state income tax (for most states).

The "Establishment Date" of an HSA is important because you can only receive tax-free distributions to pay or be reimbursed for qualified medical expenses incurred after the date the HSA is considered "established". Remember to always keep receipts as proof for any expenses incurred in the event you are audited.

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

• 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. Follow the instructions for the form and file it with your Form 1040.
• If you use a distribution from your HSA for non-qualified expenses, you must pay tax on the distribution. Report the amount on Form 8889 and file it with your Form 1040. You may have to pay an additional 20% tax on your distribution. There is no additional tax on distributions made after the date you are disabled, reach age 65 or die.

You must keep records (such as receipts) sufficient to show that:

• The distributions were used exclusively to pay or reimburse qualified expenses;
• The qualified expenses had not been previously paid or reimbursed from another source; and
• The qualified expenses had not been taken as an itemized deduction in any year.

Do not send these records with your tax return. Keep them with your tax records.

If you contribute more than the maximum annual contribution to your HSA, you may withdraw the excess without penalty until the deadline (including extensions) for filing your tax return for the tax year for which the excess contribution was made. After that time, the funds are subject to both income taxes and an excise tax.

No. You cannot take the excess as an above the line deduction. You have until the filing date of your federal tax return (including extensions) to take a distribution of the excess contribution from your HSA without incurring a 6% excise tax. The amount of the excess contribution is includable in your gross income for tax purposes.

If there is clear and convincing evidence that this was a mistake, you may repay the mistaken distribution no later than April 15 following the first year that you become aware of the mistake. Under these circumstances, the distribution is not included in gross income and the 20% penalty does not apply. You will need to keep records that document the actions you took.

You have until April 17, 2018 to contribute with respect to the 2017 tax year if you are a calendar year taxpayer.

Unless your domestic partner qualifies as your dependent under federal tax laws, you cannot withdraw funds tax-free to pay for your domestic partner's qualified medical expenses.

If your domestic partner is covered by a HDHP, he or she may be eligible to open and contribute to an HSA

No. IRS rules consider these to be allowable distributions. These charges are paid tax-free.