Form 8889 - Health Savings Account
The purpose of Form 8889 is to report health savings account contributions, figure your HSA deduction and report distributions from HSAs.
Who Must File
You must file if any of the following applies:
1)You (or someone on your behalf, including your employer) mad contributions for 2005 to your HSA.
2)You acquired an interest in an HSA because of the death of the account beneficiary.
To be eligible to have contributions made to your HSA, you must be covered under a high deductible health plan and have no other health coverage except permitted coverage. If you are an eligible individual, anyone can contribute to your HSA. However, you cannot be enrolled in Medicare or be claimed as a dependent on another person's tax return. You mst be an eligible individual on the first day of a month to take an HSA deduction for that month.
Generally, an HSA is a health savings account set up exclusively for paying the qualified medical expenses of the account beneficiary or the account beneficiary's spouse or dependents.
Distributions from an HSA used exclusively to pay qualified medical expenses of the account beneficiary, spouse or dependents are excludable from gross income. You can receive distributions from an HSA even if you are not currently eligible to have contributions made to the HSA. However, any part of a distribution not used to pay qualified medical expenses is includible in gross income and is subject to an additional 10% tax unless an exception applies.
Generally, qualified medical expenses for HSA purposes are unreimbursed medical expenses that could otherwise be deducted on Schedule A. However, you cannot treat insurance premiums as qualified medical expenses except long-term care insurance, health care continuation coverage, health care coverage while receiving unemployment or Medicare and other health care coverage if you were 65 or older.