Making Manual HSA Contributions and Their Tax Benefits

One of the biggest reasons to take advantage of health savings accounts (HSAs) is the tax benefits. HSAs feature a triple tax benefit that consists of:

If you have an HSA through your job, you may choose to make HSA contributions automatically through your paychecks. It's a great way to ensure your HSA receives regular funding. However, if you don't reach the HSA annual max contribution through your payroll contributions, it may be beneficial to make manual contributions to your HSA to get a larger tax break - or simply to enjoy a larger account balance. You'll still receive all the same tax benefits from a manual contribution as you would from payroll contributions.

Horizon will help make sure you have the documentation you need to report all of your contributions, both automatic payroll and manual contributions. We will send you Form 5498-SA each year, which reports all of your HSA contributions throughout the tax year. You can also use your tax year statement on the Member Portal to ensure the reporting is accurate. Since the tax year extends into April each year instead of ending on December 31st, Horizon will send you a revised 5498-SA by May 31st if you make any contributions that need to be reflected on the form.

When you have collected your documentation, you will need to fill out Form 8889 and attach it to Form 1040. Form 8889 reports all of your HSA contributions and withdrawals to the IRS to ensure you receive your appropriate tax benefits. If you choose to use tax preparation services, many will fill this form out for you, if you can provide your contribution and withdrawal information for the year. 

For more on tax forms, see HSAs and Filing Your Taxes