Open the TaxWise software and access the taxpayer’s return.

Navigate to the Forms Tree and locate Form 8889 (HSA) or Form 8853 (MSA/Archer MSA) based on the account type.

Form 8889 reports Health Savings Account (HSA) contributions and distributions.

* Clients may have one without the other.

* 1099-SA forms report HSA distributions.

* HSA contributions made through an employer with pre-tax dollars are typically coded as W in Box 12 on the W-2.

Click Form 8889 if it is already auto-populated on the return. If it is not auto-populated, use the + icon to add form 8889 to the return.

On Part I of Form 8889, indicate if the Health Savings Account (HSA) coverage was for:

* Self-Only (typically for single taxpayers)

*Family (if the plan covered dependents or a spouse)

For Part II (Distributions) of Form 8889:

* If your client received a 1099-SA, enter the total distribution amount on Line 14a.

* If the client did not receive any distributions, you can clear this entry by pressing Ctrl + Space at the same time.

Note: Use this sparingly, as incorrectly clearing or overriding entries can cause e-filing errors.

If your client had distributions, they will likely be subject to a 20% additional tax since these funds are considered income.

To help your client avoid this tax:

* If the distributions were used for qualified medical expenses, re-enter the total distribution amount on Line 15 to offset the tax.

You can also view the tutorial here:

Entering the Health Savings Account Contributions & Distributions in TaxWise