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SIRS Form 8889 – Health Savings Accounts – Health Savings Accounts (HSAs) offer a powerful way to save for medical expenses with triple tax advantages: contributions are tax-deductible, earnings grow tax-free, and qualified withdrawals are tax-free. But to unlock these benefits, you need to report your HSA activity correctly on your tax return. Enter IRS Form 8889—the essential tool for tracking contributions, deductions, and distributions.
In this guide, we’ll break down everything you need to know about Form 8889 for tax year 2025. Whether you’re a first-time HSA user or a seasoned contributor, understanding this form ensures compliance and maximizes your savings. We’ll cover eligibility, limits, filing requirements, step-by-step instructions, and pitfalls to avoid—all based on the latest IRS guidance.
What Is a Health Savings Account (HSA)?
An HSA is a tax-advantaged savings account paired with a high-deductible health plan (HDHP). It’s designed exclusively for paying qualified medical expenses, such as doctor visits, prescriptions, and dental care. You can contribute to an HSA through payroll deductions, personal deposits, or employer matches, and the funds roll over year after year—unlike use-it-or-lose-it FSAs.
Key perks include:
- Tax-deductible contributions: Reduce your adjusted gross income (AGI).
- Tax-free growth: Investments inside the HSA aren’t taxed.
- Tax-free distributions: For qualified medical expenses only.
HSAs are portable, meaning they stay with you even if you switch jobs. However, they’re only available if you’re covered by an HDHP and meet other eligibility rules. For 2025, recent IRS updates expand flexibility around telehealth and preventive care, making HSAs more accessible.
HSA Eligibility Requirements for 2025
Not everyone can contribute to an HSA. To qualify as an “eligible individual,” you must:
- Be covered by an HDHP on the first day of the month.
- Have no other health coverage (except permitted types like dental, vision, or workers’ compensation).
- Not be enrolled in Medicare.
- Not be claimed as a dependent on someone else’s tax return.
HDHP Minimums and Maximums for 2025
Your health plan must meet these thresholds to qualify as an HDHP:
- Self-only coverage: Minimum annual deductible of $1,650; maximum out-of-pocket expenses of $8,300.
- Family coverage: Minimum annual deductible of $3,300; maximum out-of-pocket expenses of $16,600.
Permitted coverage exceptions include telehealth and remote care services without a deductible—thanks to changes from the One Big Beautiful Bill Act (P.L. 119-21). Preventive care, like insulin products or continuous glucose monitors, can also bypass deductibles.
If you’re married, each spouse needs their own HSA; joint accounts aren’t allowed. Spouses can split family coverage contributions by agreement.
2025 HSA Contribution Limits
The IRS sets annual limits based on your coverage type and age. For tax year 2025:
- Self-only HDHP: $4,300.
- Family HDHP: $8,550.
- Catch-up contribution (age 55 or older by year-end): Additional $1,000 (prorated if Medicare enrollment affects eligibility).
If you’re eligible under the “last-month rule” (HDHP on December 1 and no disqualifying coverage for the prior 12 months), you can contribute the full amount retroactively. Employer contributions count toward your limit but are excluded from your taxable income.
Contributions can be made until April 15, 2026, for 2025. Exceeding limits triggers a 6% excise tax, reported on Form 5329.
Who Must File IRS Form 8889?
You must attach Form 8889 to your Form 1040, 1040-SR, or 1040-NR if:
- You (or someone else) contributed to your HSA in 2025.
- Your HSA made any distributions.
- You acquired an HSA due to a beneficiary’s death.
- You failed to maintain HDHP coverage during a testing period (last-month rule).
Even if you have no taxable income, file if distributions occurred. Use the form to calculate your deduction, report taxable distributions, and assess penalties.
IRS Form 8889 Download and Printable
Download and Print: IRS Form 8889
How to Complete IRS Form 8889: Step-by-Step Guide
Form 8889 has three parts. Download the latest version from IRS.gov. Always use the 2025 instructions for accuracy.
Part I: HSA Contributions and Deduction
This section figures your allowable deduction and flags excess contributions.
- Line 1: Check your HDHP type (self-only or family) based on the longest coverage period or December 1 status.
- Line 2: Enter personal contributions for 2025 (exclude employer or rollover amounts). Include post-2025 deadline contributions if designated for 2025.
- Line 3: Calculate your contribution limit using the IRS worksheet—prorate for partial-year eligibility ($4,300 self-only or $8,550 family max).
- Lines 4-8: Adjust for months ineligible (e.g., Medicare enrollment) and employer contributions from W-2 Box 12 (Code W).
- Line 9: Total employer contributions.
- Line 13: Your deductible amount (lesser of Line 2 or allowable limit). Carry excess to Form 5329 for the 6% tax.
For married couples, allocate family limits on Line 6.
Part II: HSA Distributions
Report withdrawals here to determine if they’re taxable.
- Line 14a: Total distributions from Form 1099-SA, Box 1.
- Line 14b: Subtract rollovers or withdrawn excess contributions.
- Line 15: Enter amounts used for qualified medical expenses (self, spouse, dependents).
- Line 16: Taxable amount (Line 14a minus qualified uses).
- Lines 17a/17b: Calculate the 20% additional tax on non-qualified distributions (waived if age 65+, disabled, or after death).
Qualified expenses must occur after HSA establishment and include items like OTC meds or menstrual products.
Part III: Income and Additional Tax for Failure To Maintain HDHP Coverage
If you used the last-month rule but lost eligibility in the testing period:
- Line 18: Include excess contributions as income.
- Line 19: Report qualified HSA funding distributions from IRAs.
- Add a 10% tax on the includible amount.
Common Mistakes to Avoid When Filing Form 8889
Even savvy savers slip up on Form 8889. Here’s how to steer clear:
- Confusing payroll vs. personal contributions: Line 2 excludes payroll deductions (reported on Line 9 via W-2). Double-counting inflates your deduction.
- Ignoring proration or last-month rule: Partial-year eligibility reduces limits—use the IRS worksheet to avoid excess penalties.
- Not reporting all distributions: Even tax-free withdrawals must be listed; omissions trigger audits.
- Overlooking catch-up contributions: If 55+, add $1,000—but only if not on Medicare.
- Forgetting qualified HSA funding distributions: One-time IRA transfers reduce your annual limit and start a testing period.
Sloppy reporting can lead to 6%, 10%, or 20% penalties. Review your 1099-SA and W-2 carefully.
Frequently Asked Questions (FAQs) About IRS Form 8889 and HSAs
Can I contribute to an HSA if I’m on Medicare?
No—enrollment zeros out your limit from that month. Retroactive Medicare can make prior contributions excess.
What if my employer contributes to my HSA?
It’s tax-free but reduces your personal limit. Report on Line 9.
Are HSA rollovers taxable?
No, if completed within 60 days (one per year) or via direct trustee transfer.
How do HSAs coordinate with FSAs or HRAs?
Limited-purpose FSAs (dental/vision only) are okay, but general coverage disqualifies HSA contributions.
What’s new for 2025 HSAs?
Expanded telehealth safe harbors and preventive care (e.g., condoms, glucose monitors) without deductibles.
Final Thoughts: Maximize Your HSA with Proper Form 8889 Filing
IRS Form 8889 is your gateway to HSA tax breaks, but accuracy is key to avoiding penalties. For 2025, leverage higher limits and new flexibilities to build a robust health savings strategy. Consult a tax professional for complex situations, and always reference the official IRS instructions.
Ready to file? Head to IRS.gov for free tools and e-filing options. Start contributing today—your future self (and wallet) will thank you.
This article is for informational purposes only and not tax advice. Verify with the IRS or a qualified advisor.