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What is a 1099-SA form?

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What is a 1099-SA form?

We’ll just go ahead and say it – there are a lot of 1099 forms. If you’re self-employed, you know exactly what we’re talking about. There are 1099 forms that report your earned income, like the 1099-NEC, but there are also forms, like the 1099-SA, that tell the IRS how much you withdrew from your health insurance account every year. This applies to Health Saving Accounts (HSA) and Medical Savings Accounts (MSA) like Archer Medical Savings Account (Archer MSA) and Medicare accounts (Medicare MSA). If you receive Form 1099-SA, you’ll need to report it when filing your tax return. If you have multiple health insurance plans, you’ll need to file a separate form for each plan. The form you’ll use to report Form 1099-SA depends on the type of account you have and whether it is an inherited account or a personal account. Key takeaways:
  • Form 1099-SA shows the annual distribution amount from a health insurance account
  • It is different from earned income 1099 forms like 1099-NEC or 1099-MISC
  • Receivers of this form must report it on their tax return using Form 8889 or Form 8853

Table of contents

I received Form 1099-SA. What does this mean?...Read more

What health expenses are tax-free?...Read more

How do I file Form 1099-SA?...Read more

I received Form 1099-SA. What does this mean?

You’ll usually receive the 1099-SA form from your health insurance provider by the end of January, like all other 1099 forms. Opening an account like this is actually beneficial to your taxes as you can deduct any contribution you make to the account. And most of the time, the distribution you receive from the account can be used tax-free. This is especially useful for self-employed individuals who are often in charge of paying for their health insurance.
I received Form 1099-SA. <span style="background: linear-gradient(101.76deg, #19ACA4 1.98%, #3563CD 100.59%);
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In addition to being able to claim a deduction on the contributions you make to your account for the current year, certain accounts like HSAs and Archer MSAs allow you to carry over any unused balances with no expiration date. You can also invest the health insurance account contributions and use those earnings tax-free as long as you spend them on IRS-approved health expenses. We’ll talk about this a little more in the next section. You’ll have to report any earnings on your return if you pass your contribution limits for that tax year. If you ended up withdrawing past your limit, you’d have to report this on your taxes as well, even if you used it for qualified health expenses. You may also have to pay a penalty.

Quick tip

Use a 1099 tax calculator to find other tax deductions you can use to lower your tax bill.

What health expenses are tax-free?

The IRS allows you to use the distribution from your health plan account to pay for certain medical expenses tax-free. While there is no specific list that the IRS has provided, the general rule is that you should be able to itemize that expense on Schedule A when you file. You’ll know if you spent your distribution on tax-free health expenses by checking box 3 on your Form 1099-SA. If the distribution code is one, your expenses are tax-free. If the code is five, you’ll have to report the unspent distribution amount as income.
What health expenses <span style="background: linear-gradient(101.76deg, #19ACA4 1.98%, #3563CD 100.59%);
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How do I file Form 1099-SA?

The good news is that you don't have to actually file Form 1099-SA since it’s done by a medical insurance provider. So, it’s a little different from how you would normally report 1099 forms related to self-employment, like the 1099-K. This is because this form is only relates to your federal income tax and not your self-employment tax. Now there are two ways you can report the 1099-SA form: with Form 8889 or with Form 8853. Form 8889 is for individuals who have a Health Savings Account (HSA), either paid for themselves or inherited due to the death of their spouse. Form 8853 is used by individuals who have an MSA (Archer, Medicare). In both cases, you would attach this to your Form 1040. Any unused distribution from either type of account will be taxable. For MSA plans, you’ll also need to pay an additional 20% which you can directly calculate on Form 8853.
How do I <span style="background: linear-gradient(101.76deg, #19ACA4 1.98%, #3563CD 100.59%);
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Another thing to remember is that MSA distributions can only be used to pay for expenses of the account holder while HSA distributions can be used for the account holder, spouse and their dependents. Like we said before, there are a lot of 1099 forms to keep track of. If you’re self-employed, why not link your expenses to FlyFin? A.I. can easily find your tax deductions that you can take advantage of and lower your tax bill. CPAs who are experts in 1099 taxes are available 24/7 on the app and can even prepare and file your tax returns for you.

1099 B form

A 1099-B form is an informational return form for recording the sale of investments by brokerages. This is reported on Form 8949 and Schedule D.

1099 G form

The 1099-G form is used to report payments made by governments to individuals. Unemployment compensation should be reported on Schedule 1 (Form 1040).

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2022 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

Form 1040 Schedule SE

SE stands for self-employment tax, and this is where people who make a living working for themselves or freelancing pay Social Security and Medicare taxes.

Form 8829

If you use your home for work, you can deduct things like utilities and supplies used for your home office or storage space used for inventory from your taxes. Use this form to figure out how much you can deduct.

Form 1099

If you're self-employed, this is the form that the people who pay you use to report those payments to the IRS. Here's what you need to know about it.

Losing a 1099 form

If you've lost a 1099 that was sent to you, fear not. Here's what you can do if it happens.

Form 1099-NEC

Entities that pay you for services as a freelancer or independent contractor report those payments to the IRS using this 1099 form.

Form 1099-MISC

Entities that give you other forms of income as a freelancer or independent contractor, such as prize money or money for healthcare, report those payments to the IRS using this 1099 form.

Avoid 1099-Misc

There are ways to lower the amount of tax you pay as a 1099 self-employed individual. Here are five proven strategies.

Form 1099-K

If you receive payments of $600 or more as a self-employed individual through credit card companies and payment services like PayPal, they report those payments to the IRS using this 1099 form.

Paypal

Here's how to receive a 1099-K from PayPal and how to use it to file and pay your 1099 taxes.

Shopify

Here's how to receive a 1099-K from Shopify and how to use it to file and pay your 1099 taxes.

Venmo

Here's how to receive a 1099-K from Venmo and how to use it to file and pay your 1099 taxes.

Form 1099-MISC VS Form 1099-NEC

Understand what makes these 1099 forms different from each other and what they mean for you as a 1099 freelancer, independent contractor or self-employed individual.

Form 1040-ES

This vital tax form for self-employed individuals and freelancers is how they pay quarterly taxes, which they need to estimate (ES means estimated taxes).

1099 A form

The 1099-A form is received when an owned property has been foreclosed. This form is reported on Schedule D after calculating capital gain or loss.

1099 B form

A 1099-B form is an informational return form for recording the sale of investments by brokerages. This is reported on Form 8949 and Schedule D.

1099 G form

The 1099-G form is used to report payments made by governments to individuals. Unemployment compensation should be reported on Schedule 1 (Form 1040).

Form 1040

This is the most common document in the US tax system. It's the master tax return that every American fills out.

Form 1040 Schedule C

Running a business by yourself? This is the tax return 2022 schedule where you report how much (knock on wood) profit you made or how much you (heaven forbid) lost over the course of the year.

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