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dj2
Level 2

Shouldn't the total HSA contributions reported on my tax return always match with the sum total of Box 2 and Box 3 on Form 5498-SA?

TL:DR  Here goes nothing. I never understood Form 5498-SA. I basically asked this question years ago and the reply I received was  that Form 5498-SA is for information purposes only.  So if that's the case, let me use this hypothetical example filing for tax year 2019:

Box 2  lists the total HSA contributions made in 2019
however note that the amount reported in Box 2 is for the calendar year (Jan. 1, 2019 - Dec. 31, 2019)

Box 3 lists the total HSA contributions made in 2020 for tax year 2019
I make my own contributions. My employer plays no part with the HSA. Now that info is out of the way,  
Let's say Box 2 is $900
Let's say in Box 3 is $300
And of that $900 made in calendar year 2019, there was $500 applied to contributions in tax year 2018. Therefore I didn't report that $500 on the tax return for 2019. What I did report on my tax return is the difference of $900 - $500 = $400 plus the amount of $300 in Box 3. So the total deduction for contributions to the HSA reported on my 2019 tax return was $700.

Since the Trustee of my HSA submits this info to the IRS, they see my $700 deduction reported on Form 8889, and Form 5498-SA reports a sum total of  Boxes 2 and 3 of $1,200 for contributions applied for 2019.
So if Form 5498-SA is for information purposes only, how does the IRS know I haven't broken rules? I could theoretically report an amount of on my tax return for contributions applied to 2019 that aren't even true (not that I would, I'm just saying).  There isn't is another official IRS Form that I'm aware of which exists for 2019's tax return.

This happens every. single.tax.year.with contribution amounts reported on Form 5498-SA incorrect because Box 2 reports the contributions made for the entire calendar year regardless of the fact a portion of the total amount was applied to a previous tax year.
1 Best answer

Accepted Solutions
BillM223
Expert Alumni

Shouldn't the total HSA contributions reported on my tax return always match with the sum total of Box 2 and Box 3 on Form 5498-SA?

Your understanding of the entries on those two boxes is correct.

 

However, the IRS designed both the 8889 and the 5498-SA so presumably (knock on wood) they had a reason for doing it this way.

 

Perhaps the IRS is maintaining reports on your account that span multiple years, in which case, it would become clear what you did year-over-year. 

 

So long as everybody is filling the forms out according to the instructions, the IRS can't ask for anything more.

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1 Reply
BillM223
Expert Alumni

Shouldn't the total HSA contributions reported on my tax return always match with the sum total of Box 2 and Box 3 on Form 5498-SA?

Your understanding of the entries on those two boxes is correct.

 

However, the IRS designed both the 8889 and the 5498-SA so presumably (knock on wood) they had a reason for doing it this way.

 

Perhaps the IRS is maintaining reports on your account that span multiple years, in which case, it would become clear what you did year-over-year. 

 

So long as everybody is filling the forms out according to the instructions, the IRS can't ask for anything more.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

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