Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Health Savings Accounts (HSA)

Summary and Exercises

Practice Exercises

Lucy Hildago Scenario 1

This scenario does not require you to prepare a tax return. Review Form 8889 and use your resource materials and the interview notes to answer the questions below.

Interview Notes

  • Lucy is a single mother, age 35. Lucy's 2-year-old daughter, Carmen, lives with her.
  • Lucy is enrolled in an HDHP with family coverage and had the same coverage for the entire year. She established an HSA two years ago.
  • Lucy put $1,200 of her own money in the HSA. She also tells you that her grandmother deposited $3,000 in that account for her during the year.
  • Lucy's Form W-2 shows $1,020 in box 12 with code W. She has Form 5498-SA showing $5,220 in box 2.

Click here to open Form 8889, Health Savings Accounts (HSAs). Form 8889 is provided as a reference to assist you in answering the questions. Use your resource materials and the interview notes to answer the questions below.

Question 1

Lucy can identify the employer's HSA contribution by the Code W in box 12 on her Form W-2.

A.
B.

Question 2

What amount will be entered on Form 8889, line 2?

A.
B.
C.
D.

Question 3

After completing Form 8889, Part I, what is Lucy's HSA deduction?

A.
B.
C.
D.
Form 8889

Form 8889