W2 box 12 shows 6000 for code W. I contributed $4,750 and my employer $1,250. This shows $6,000 of income on line 21 of my 1040. How do reduce to $1,250 on line 21?

1 reply
19 views

No text available

TurboTax Deluxe Windows

Answer

Both the employee and employer contributions should be showing in box 12, code W. IRS Publication 969, for tax year 2008 ( page 10) indicates that contributions made by the employer via salary reduction are not included in the employee’s income. Contributions to an employee’s account by an employer using the amount of an employee’s salary reduction through a cafeteria plan are treated as employer contributions. Thus the total is displayed on the W2.

Therefore, the amount in Box 12 will include all of the employee payroll deductions and any employer money contributed. This is PRE-TAX money and gets reported on Form 8889 (required of all HSA account owners) as an EMPLOYER contribution (Line 9). Because there were no taxes deducted form this amount the employee/taxpayer cannot deduct it from gross income.

However, if the employee were to send money directly to the HSA, that amount would be reported on line 2 of Form 8889. The total of lines 2 and 9 cannot exceed the maximum annual contribution limits set by the IRS for the applicable tax year.

http://www.hsaadministrators.info/blog/employer-contributions-to-hsas-tax-reporting-tidbits

A

Anonymous

Answer

Both the employee and employer contributions should be showing in box 12, code W. IRS Publication 969, for tax year 2008 ( page 10) indicates that contributions made by the employer via salary reduction are not included in the employee’s income. Contributions to an employee’s account by an employer using the amount of an employee’s salary reduction through a cafeteria plan are treated as employer contributions. Thus the total is displayed on the W2.

Therefore, the amount in Box 12 will include all of the employee payroll deductions and any employer money contributed. This is PRE-TAX money and gets reported on Form 8889 (required of all HSA account owners) as an EMPLOYER contribution (Line 9). Because there were no taxes deducted form this amount the employee/taxpayer cannot deduct it from gross income.

However, if the employee were to send money directly to the HSA, that amount would be reported on line 2 of Form 8889. The total of lines 2 and 9 cannot exceed the maximum annual contribution limits set by the IRS for the applicable tax year.

http://www.hsaadministrators.info/blog/employer-contributions-to-hsas-tax-reporting-tidbits