What is a health savings account (HSA)?

A health savings account (HSA) is a tax-free savings account you can use to pay for medical expenses if you have a high-deductible health plan (HDHP). 

If you use your HSA for non-medical expenses, you'll be taxed on the money and charged a 20% penalty unless you're disabled or under 65.

There’s an annual limit on how much money you and your employer can put into your HSA. Read this article for more information about excess contributions.

HSA contributions made by you and your employer will be in box 12 of your W-2 with the code W.

If you have an HSA, you may use these tax forms:

• Form 5498-SA: An informational form that you don’t need to enter
• Form 1099-SA: A form that reports how much HSA money you spent
• Form 8889: A form that TurboTax will generate for you if you contributed to, or spent money from, your HSA