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March 16, 2008
Important Tax Filing information for those with Health Savings Accounts
The IRS has recently released an updated version of Publication 969 for use in preparing tax returns for the 2007 fiscal year. Publication 969 pertains to tax favored health accounts, including information regarding Health Savings Accounts, Health Reimbursement Arrangements, Flexible Spending Accounts, Archer Medical Savings Accounts, and Medicare Advantage Medical Savings Accounts.
The updated document reflects the new 2007 limits for Health Savings Accounts and incorporate changes made by the Tax Relief and Health Care Act of 2006 which took effect in 2007.
Among these changes were the elimination of the annual HDHP deductible cap on Health Savings Account contributions and the addition of the “last month rule” which treats individuals who become HSA eligible on Dec 1st as being HSA eligible for the entirety of the tax year. There is also updated information on qualified HSA distributions from Flexible Spending Accounts and Health Reimbursement Arrangements, distributions from IRAs, and instructions on how to properly report any 10% tax penalties on 1040 forms.
To read IRS Publication 969, click here.
Posted by Wiley Long at March 16, 2008 02:05 PM