Form 8889 determines if the amount contributed is taxable. If the contributions are in excess you will be taxed on it. Example of questions for 8889 (Part 1)
1. check if self or family
2. HSA contributions you made or someone made on your behalf (do not include employer contributions)
3. enter individual (3,500) or family (7,000) if under 55. If, at the end of 2019, you were age 55 or older and unmarried or married with self-only HDHP coverage for the entire year, you can increase the amount determined in (3) or (4) for MSA by $1,000 (the additional contribution amount)
4. This is for MSA
5. Subtract line 4 from 3
Continue until your reach 9. This is the amount you will enter from your W2 Box 12 code W
10. This is if your fund distributions with an IRA
11. Add 9 and 10
12. Subtract 11 from 8
13. enter smaller of line 2 or line 12
Part II
14a. This is where you will enter any distributions from your HSA for medical expenses
14b. This is where you include distributions rolled over to another HSA or excess contributions (This is not Common)
14c. Subtract line 14a from 14b
15. Qualified medical Expenses paid using HSA distributions. (This will be reported on a 1099-SA box 1 Gross distributions box 3 should have code 1 (which is normal tax free distributions) and box 5 should have the type of health fund HSA, Archer MSA, MA MSA
16. subtract 15 from 14. This will be your taxable distribution
Once you finish the form 8889, when asked if this amount was used only for medical expenses, check yes if yes, and the amount should not be taxable.
