BillM223
Expert Alumni

Deductions & credits

Because HSA contributions are not done the way you think.

 

Most taxpayers have HSA contributions contributed by payroll deduction. When you get your W-2, you will see a code W in box 12, which is the sum of all your payroll deductions for the HSA and whatever your employer kicks in.

 

When your W-2 is printed, the code W amount is removed from Wages in boxes 1, 3, and 5. So, there is no "deduction" for this type of contribution, because it was never in your income in the first place.

 

But you can also make contributions directly to the HSA custodian, not through your employer. These contributions (if any) are shown on line 13 of Schedule 1 (1040). This is the deductions that you see on the HSA Summary.

 

A majority of taxpayers do it the way you do: through payroll deduction. You don't see any "deductions" but you get the benefit all the same because your income is reduced.

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