IRS Form 1099-SA

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IRS Form 1099-SA

The citizens of the US are able to receive several tax returns to save some expenditures on health care. An IRS form called 1099-SA is the form that one can be assigned to if one must include a distribution from HSA, MCA, or MSA on the federal tax. One is available to obtain a health savings account or a medical savings account from which those expenditures can be partially extracted via taxes. So, in case you are interested in the completion of Form 1099-SA, make sure to read the full article.

First of all, one should not mix up the form 1099-SA with the Form SSA-1099, as the latter one is connected with Social Security profits. On the other hand, IRS Form 1099-SA is needed in case one is utilizing funds from an HSA. The institution managing that account has to report all distributions in Form 1099-SA. One is also required to report the information contained in a Form 1099-SA to their federal income tax return, which is usually reflected in other IRS forms.

IRS identified several qualified healthcare expenditures, and they incorporate all of the following:

  • Most kinds of medical care and services;
  • Dental and ophthalmological services;
  • Prescription drugs and certain regular medications are not compensated by insurance.

Once you have taken a distribution from your Health Savings account, your plan administrator will assign a document 1099-SA with the dollar sum of the distribution. One may calculate all of the medical expenditures into one total sum that should compensate the distribution. Moreover, even if you do not usually make the count of your deductions, and you would probably want to sum up all of your medicinal expenditures to make up for the distribution.

It is important to notice that one’s distribution will be taxed solely in the situations in which one has less medical expenditures than the distribution that has been taken. One will also have to note and write out the dollar sum of the excess distribution in the tax return part and pay regular expense tax on that amount. Furthermore, there is a 20 percent fine for excessive distribution; hence, be cautious with the withdrawn amount of money, as it should not exceed the dollar sum you actually need.

Make sure to acknowledge that this distribution may be paid straight to the health care provider or the account owner. For each type of plan, a separate document must be constructed.

How to Get IRS Form 1099-SA

One is able to receive this document if one paid for medical expenditures from the HSA or MSA during the tax year. One is able to receive this form either by mail or electronically, and it all depends on your chosen delivery preference. This document is constructed for each HSA distribution of money that one makes in the current tax year.

It is frequently recommended to receive the 1099-SA before one enters the medical expenses so that the medical expenditure deductions could be counted accurately.

Other IRS Forms for Self-employed

Complexity of your finances is what determines the number and types of IRS forms you have to file. We have prepared some other forms that might be useful for you.


How to Fill Out Form 1099-SA

If you want to successfully write out any forms, make sure to use our form-building software to build all needed forms. But now, let’s get back to the completion of form 1099-SA; utilize this document in case you want to get your tax returns.

First of all, we can see that the form consists of 5 pages. The first page is dedicated to IRS Center and is called Copy 1. The next page is Copy B, and it is assigned to the Recipient; the next page includes instructions for the Recipient (also called Beneficiary). The next page is called Copy C, and it is assigned to Trustee or Payer; the next page, subsequently, includes instructions for Trustee or Payer.

In general, all of the pages with filling-out sections have a similar structure. Let’s review how to write them out:

1. Fill out the first section that is connected with comprehensive data about the Trustee or Payer. Provide the name of the latter one, their address, city, state, and country, where they live. Make sure to enter postal code and cell number;

step 1 - filling out an irs form 1099-sa

2. In the two following sections, fill out the Taxpayer Identification Number of both the Payer and the Beneficiary (the last four digits);

step 2 - filling out an irs form 1099-sa

3. In the next segment, fill out the name of the Recipient;

step 3 - filling out an irs form 1099-sa

4. In the next section, one should enter the data about the street address of the Beneficiary, including the number of the apartment;

step 4 - filling out an irs form 1099-sa

5. In the next part, one should fill out the city, state, and country and postal code of the Beneficiary;

step 5 - filling out an irs form 1099-sa

6. Then proceed to the next segment, where one should write out the Account Number. This number can show the account or other unique number that is dedicated to the Payer in order to distinguish the account;

step 6 - filling out an irs form 1099-sa

7. Afterward, fill out Box 1, which is dedicated to Gross Distribution. This field will show the dollar sum of money that you took out of your HSA during the year;

step 7 - filling out an irs form 1099-sa

8. Then write out the information in Box 2, which is connected with Income from Excess Contributions. Your Trustee should report the dollar sum in this section if you had spent more than you were allowed to on your Health Savings Account;

step 8 - filling out an irs form 1099-sa

9. The next box is dedicated to the Distribution Code. There are many options that could possibly be chosen:

  • In case your distribution was used to pay for the regular medical expenses, you should put Code 1 to indicate that it was a normal distribution;
  • One should utilize Code 2 if they have any excess distributions;
  • Utilize Code 3 if one made distributions after the account owner was disabled
  • Distribution of Death is assigned to Code 4. It can be used in the year of death or the year after death;
  • For a prohibited transaction, use Code 5;
  • Utilize Code 6 for the distribution of death after the year of death to a Non-Resident Reciever.

step 9 - filling out an irs form 1099-sa

10. In the next box, one should put the information that is dedicated to the Fair Market Value of the total HSA account at the date of death (if applicable);

step 10 - filling out an irs form 1099-sa

11. Finally, in the next box, one must indicate which account should be used: HSA, or an Archer MSA, or an MA MSA.

step 11 - filling out an irs form 1099-sa