If you are completing Form 8889 for an HSA Deduction, there is a limitation to the amount of deduction that you can take. You are also limited on deducting contributions for any month that you were enrolled in Medicare.
What are the limits for HSA?
For Self-Only coverage under your HSA, the 2023 limitation is $3,850 ($4,850 if you were age 55 or older). For Family coverage, this limitation in 2023 is $7,750 ($8,750 if you were age 55 or older). The program will automatically calculate your limitation if you had Self-Only coverage, or if you had Family Coverage and you and your spouse did not have separate HSAs. If you had Family Coverage AND you and your spouse have separate HSAs, you will need to manually figure your limitation.
How is my limitation determined?
You have to determine your limitation by looking at each month of the tax year to determine if you were an eligible individual for that specific month. The IRS provides a worksheet to calculate the amount of this limitation. It is located within the instructions for Form 8889, which you can access using the link below. Before filling out the worksheet, read the brief instructions for "Line 3" that begins in the middle column of page 4. These instructions list exceptions that can affect how the worksheet gets filled out.
Where do I enter my information?
The worksheet that must be completed is on page 5 of the instructions. Complete this worksheet and retain a copy for your records. Once this worksheet has been finished, you can properly complete Form 8889 for your HSA Deduction by entering the calculated limitation amount. Form 8889 can be found within the program by going to:
- Federal
- Deductions - Select My Forms
- Adjustments to Income
- Health Savings Account Form 8889
Please refer to the Instructions for Form 8889 form more information.