Articles — Ascensus

Answering Your Clients’ Tricky Tax Reporting Questions

As your clients prepare their tax returns, you may find yourself receiving a barrage of tax reporting questions. Hopefully, here are the answers to some of your challenging questions during tax season.

Brace Yourself for 2022 Contributions (And Watch for Those Last-Minute Prior-Year Contributions)

The first few months of each year usually bring an increased number of contributions for individual retirement arrangements (IRAs) and health savings accounts (HSAs). During this flurry of contribution activity, it’s important to make sure that your clients clearly designate the year that a contribution is for.

HSA, IRAAscensusFebruary 17, 2022Compliance & Operations, IRA, Traditional IRA, Roth IRA, HSA, Contribution, Reporting

How Insurance Coverage May Affect HSA Eligibility

To make HSA contributions, an individual must be covered by a qualifying high deductible health plan (HDHP), and not be covered by a plan that is not an HDHP. However, when it comes to HSA eligibility, not all HDHPs are created equal.

HSAAscensusFebruary 17, 2022Compliance & Operations, HSA, Contribution, Distribution, Eligibility, Q&A

Retirement Enhancements Expected in 2022 Legislative Proposals

Several bills with provisions that would alter tax-advantaged savings arrangements have been introduced. If these provisions are approved, they represent important priorities for the House and Senate lawmakers responsible for their drafting and introduction.

Contributing to an HSA With a Qualified HSA Funding Distribution From an IRA

A qualified HSA funding distribution allows HSA owners to directly move their Traditional or Roth IRA assets to their HSA as a regular contribution. Qualified HSA funding distributions are not deductible, however, and cannot be treated as a prior-year contribution.

expert, HSAAscensusJanuary 20, 2022Compliance & Operations, HSA, IRA, Contribution, Q&A

April 18 is IRS Tax Filing Deadline for Most Filers

The IRS announced that the filing deadline for 2021 tax returns or requests for extension is April 18, 2022, for most taxpayers.

IRA, HSA, News Brief, Employer PlanAscensusJanuary 20, 2022HSA, IRA, Compliance & Operations, Regulations, IRS, Traditional IRA, Roth IRA, Tax, Reporting

IRS Issues Deadline Relief for Colorado Wildfire Victims, Washington Flooding and Mudslide Victims

In early January, the IRS issued a news release announcing the postponement of certain tax-related deadlines for victims of wildfires and straight-line winds in Colorado. The IRS also issued a news release in mid-January announcing the postponement of certain tax-related deadlines for victims of flooding and mudslides in Washington.

Time to Gear Up for First-Quarter Reporting Requirements

Financial organizations that administer IRAs, health savings accounts (HSAs), and Coverdell education savings accounts (ESA) have many reporting deadlines looming ahead in 2022. Here’s a rundown of the impending due dates in the first quarter.

HSA, IRA, ESAAscensusDecember 16, 2021Compliance & Operations, IRA, Traditional IRA, Roth IRA, HSA, Coverdell ESA

Know the Eligibility Rules When Setting Up HSAs

As benefits enrollment season fast approaches, you may see an increase in new clients looking to set up HSAs. Now may be a perfect time for you and your staff members to brush up on your HSA knowledge, especially when it comes to understanding HSA eligibility.

HSAAscensusOctober 21, 2021Compliance & Operations, HSA, Eligibility

Be Sure Your Clients Understand HSA Distributions

If you have clients who own an HSA, they may have questions about using their HSA money to pay or reimburse themselves for medical expenses that they’ve incurred. Do they understand the tax advantages—and any tax consequences—of HSA distributions? Educating your clients about HSA distributions can help them get the most from their HSA savings.

HSAAscensusSeptember 16, 2021Compliance & Operations, HSA, Distribution, Eligibility

Help Clients Maximize their Saving Strategy with an HSA

With multiple tax-advantaged savings options available, your clients may often wonder where to defer their money when saving for the future. Sure, there’s the 401(k) plan and the IRA, but they shouldn’t forget about the HSA. For clients who have access to all of those, they may need to prioritize where they save to ensure that they get the most from their dollars.

HSAAscensusJuly 15, 2021Business Insights, HSA, 401(k) Plan, Contribution

Avoid Negative HSA Balances and their Negative Tax Consequences

If your organization allows the use checks or debit cards to withdraw HSA assets, it risks extending credit to the HSA owner, which is a prohibited transaction. Adopting certain policies and procedures may help prevent that from happening, along with the negative tax consequences.

Marital or Dependent Status May Affect HSA Contribution Limit, Qualified Medical Expenses

What is the maximum amount an unmarried couple with family HDHP coverage can contribute to their HSAs? Can a child listed as a dependent for HDHP coverage purposes but not claimed as a tax dependent still use HSA assets to pay medical expenses? How does divorce affect the HSA contribution limit?

HSA, expertAscensusJune 17, 2021Compliance & Operations, HSA, Contribution, Distribution, Eligibility, Q&A

IRS Extends IRA, HSA, ESA Contribution Deadline and Form 5498 Filing Deadline

The IRS officially extended the deadline for individuals to file their federal tax returns and make IRA, HSA, and ESA contributions with Notice 2021-21. This notice also gives financial organizations until June 30, 2021, to file and furnish Form 5498 series forms.

IRA, HSA, ESAAscensusApril 15, 2021Compliance & Operations, IRA, HSA, Coverdell ESA, IRS, Guidance & Legislation, Contribution, Form 5498, Reporting, Tax

Recouping HSA Contributions

An employer generally cannot recoup contributions it made to an employee’s HSA. But there are certain circumstances in which the IRS does allow an employer to recoup, or recover, contributions.

HSA, expertAscensusApril 15, 2021Compliance & Operations, HSA, Contribution, Q&A

When Is It OK to Accept Last-Minute Contributions?

Find out when it’s okay and when it’s not okay to accept prior-year contributions that are mailed to your organization or deposited through an ACH payment after the contribution deadline.

ESA, HSA, IRAAscensusMarch 18, 2021Compliance & Operations, IRA, HSA, Coverdell ESA, SIMPLE IRA Plan, SEP Plan, Contribution, Reporting

Reporting Contributions on Forms 5498 and 5498-SA

If your financial organization administers IRAs or HSAs, it’s responsible for reporting the contributions made to these accounts to account owners and to the IRS annually by May 31. Find out how to complete this type of reporting on Forms 5498 and 5498-SA.

Comparing Retirement Saving via Traditional and Roth IRAs, and HSAs

Although your organization may not be equipped to provide individualized financial advice, you can share general information about the advantages and disadvantages of three common tax-advantaged savings accounts.