Form 8853 – Archer MSAs and Long-Term Care Insurance Contracts

Form 8853 is a crucial IRS form that individuals need to file to report information related to Archer Medical Savings Accounts (MSAs) and the tax implications of withdrawals for long-term care insurance contracts. This form serves as a means of ensuring compliance with tax regulations concerning these specific financial instruments.

Key Features and Components

Archer MSAs are tax-advantaged medical savings accounts available to individuals covered by a high-deductible health plan. Contributions to these accounts are tax-deductible, and withdrawals used for qualified medical expenses are tax-free. Long-term care insurance contracts provide coverage for the costs associated with long-term care services, offering policyholders financial protection against expensive healthcare needs.

Relevant Filing Requirements

Individuals who have engaged in transactions involving Archer MSAs or withdrawals for long-term care insurance contracts during the tax year must complete and file Form 8853 with their tax return. This form requires detailed information on the account holders, contributions, distributions, and any taxable amounts associated with the transactions.

Penalties for Non-Compliance

Failure to properly report transactions related to Archer MSAs and long-term care insurance contracts on Form 8853 can result in penalties and interest charges assessed by the IRS. Non-compliance with tax filing requirements may lead to audits, fines, or other adverse consequences that could impact an individual’s financial standing.

Importance in Tax Resolution

Understanding and accurately completing Form 8853 is essential for maintaining tax compliance and meeting the regulatory obligations associated with Archer MSAs and long-term care insurance contracts. By adhering to the filing requirements outlined in this form, individuals can ensure that they are properly reporting their financial activities and avoiding potential penalties for non-compliance.