Peggy Walker, age 48, is a single parent raising her son, Marcus. • Marcus is a full-time student and had no
income. • Peggy qualifies to file as Head of Household. • Peggy does not have enough deductions to itemize. • For the last five years, Peggy has had family health coverage through a High Deductible Health Plan (HDHP) from her employer. • Peggy has had an HSA for several years. • In 2019, she contributed $1,500 to her HSA. • Peggy's grandmother helped her out and contributed $1,000 to her HSA in 2019. • Peggy's employer also contributed $600 to her HSA in 2019. • Peggy paid the following expenses in 2019 using money from her HSA: - Urgent care bill for Peggy - $615 - Prescription medicine for Peggy - $125 - Insulin for Marcus - $140 - Dancing lessons for Peggy - $200 - Doctor visits for Marcus - $400 • Peggy and Marcus are U.S. citizens and have valid Social Security numbers.
12. The amount Peggy Walker will report on her Form 8889, line 13 is: a. $600 b. $1,500 c. $2,500 d. $3,100
13. Peggy Walker's total income includes a taxable HSA distribution of $200. a. True b. False
14. Which expense is not reported on Form 8889, line 15? a. Insulin b. Doctor's visit c. Dancing lessons d. Prescription medicine
15. Peggy must pay an additional 20% tax on the portion of her HSA distribution that was not used for unreimbursed qualified medical expenses. a. True b. False