Archer MSA ?

[Eli]

Client is a driller on an off shore drilling site. His W2 has a code R amount of 3222 in box 12. The program opened up form 8853 automatically. Never having done one of these, I'm ata loss on how to proceed. One of the questions concerns a deductible amount between 1900 & 2850. Where would I find this info? One other thing is: He has health insurance thru his employer via pre tax payroll deduction. would he still qualify for the Archer MSA contribution?

Thanks for any assistance!!

Eli

PS sorry for any misspellins and extra spaces....just broke my right hand yesterday...funny how we take things for granted till we dont have it or cant use it!!

[neilbrink]

Client is a driller on an off shore drilling site. His W2 has a code R amount of 3222 in box 12. The program opened up form 8853 automatically. Never having done one of these, I'm ata loss on how to proceed. One of the questions concerns a deductible amount between 1900 & 2850. Where would I find this info? One other thing is: He has health insurance thru his employer via pre tax payroll deduction. would he still qualify for the Archer MSA contribution?

Thanks for any assistance!!

Eli

PS sorry for any misspellins and extra spaces....just broke my right hand yesterday...funny how we take things for granted till we dont have it or cant use it!!

Eli, sorry about your hand. How's the other guy looking? (just a joke).

The MSA requires that a specific high deductible health plan be in place to be eligible for the MSA (Medical Savings Account). Funds that are deposited into the MSA are pre-tax and can be used to pay for medical expenses not covered by the high deductible. Funds withdrawn from this fund for those medical expenses are then tax-free.

If the emloyee did not make any contributions to the MSA, but only the employer did, there is really nothing you need to do on the 8853 contribution-wise. If the employee did make additional conrtibutions that were not pre-tax, then there is a work sheet for Line 5 on Form 8853. You will need to verify with the client that he is indeed on a qualified high deductible plan, whether it is for self only or for family, and what that deductible amount is. You can than complete the worksheet (it's easiest if he was in the plan all year rather than starting mid-year).

You will also need to complete Part 3 if he took distributions during the year from the MSA. Hope that helps. Neil

[Eli]

Eli, sorry about your hand. How's the other guy looking? (just a joke).

The MSA requires that a specific high deductible health plan be in place to be eligible for the MSA (Medical Savings Account). Funds that are deposited into the MSA are pre-tax and can be used to pay for medical expenses not covered by the high deductible. Funds withdrawn from this fund for those medical expenses are then tax-free.

If the emloyee did not make any contributions to the MSA, but only the employer did, there is really nothing you need to do on the 8853 contribution-wise. If the employee did make additional conrtibutions that were not pre-tax, then there is a work sheet for Line 5 on Form 8853. You will need to verify with the client that he is indeed on a qualified high deductible plan, whether it is for self only or for family, and what that deductible amount is. You can than complete the worksheet (it's easiest if he was in the plan all year rather than starting mid-year).

You will also need to complete Part 3 if he took distributions during the year from the MSA. Hope that helps. Neil

Neil, Thank you for your response. The client did not contribute to the MSA. He also has not taken any distributions. Can I then just delete the 8853 or does it need to be included?

Thanks again!!

PS the other guy (china hutch) came out without a sratch :mellow:

[neilbrink]

Neil, Thank you for your response. The client did not contribute to the MSA. He also has not taken any distributions. Can I then just delete the 8853 or does it need to be included?

Thanks again!!

PS the other guy (china hutch) came out without a sratch

It's probably a good idea to keep the 8853. The employer's portion flows from the W-2 to the 8853 and the IRS may just spot check to see if there is any other activity on the 8853.

[Eli]

It's probably a good idea to keep the 8853. The employer's portion flows from the W-2 to the 8853 and the IRS may just spot check to see if there is any other activity on the 8853.

Neil, Thanks again for all your assistance!!

Eli

[mcb39]

Neil, Thanks again for all your assistance!!

Eli

These are pretty much fading into the sunset and being replaced by HSAs. They were confusing to say the least. However, I had a client this year who had both because he switched in midyear. Took 3 tries to get that one filed and accepted....