Form 1099-SA: Guide for Florida Small Business Owners

If you’ve already read our Form 5498-SA guide, you know it tracks contributions into your Health Savings Account (HSA) or Archer Medical Savings Account (MSA). But here’s the twist, Form 1099-SA is its partner, the form that reports what comes out.

Think of them as two halves of the same tax coin. One shows deposits, the other withdrawals. Put them together, and you’ve got the complete picture of your health savings activity.

For Florida small business owners juggling payroll, client deadlines, and maybe even hurricane prep, understanding these two forms isn’t optional. It’s survival.

What Is Form 1099-SA?

At its simplest, Form 1099-SA is the IRS’s way of tracking distributions from your HSA, Archer MSA, or Medicare Advantage MSA. Whenever you take money out, whether for your kid’s braces, prescription meds, or, let’s be honest, a not-so-qualified weekend trip to Key West, the bank sends you this form.

It isn’t a penalty, and it’s definitely not a bill. Think of it more like a report, a simple record of money leaving your account. The tricky part comes afterward, because how you handle that report determines whether you walk away tax-free or end up facing income tax and penalties.

Want the official IRS breakdown? Check out the IRS Form 1099-SA instructions.

Form 5498-SA vs. Form 1099-SA: In vs. Out

To understand Form 1099-SA fully, you need to see it in the shadow of its sibling form.

• Form 5498-SA → reports contributions (money going in).
• Form 1099-SA → reports distributions (money going out).

Both matter when filling out Form 8889, which lives inside your Form 1040. If you miss either piece, your tax return looks incomplete.

Here’s a simple comparison:

Feature	Form 5498-SA	Form 1099-SA
Tracks	Contributions (inflows)	Distributions (outflows)
Sent By	HSA or MSA custodian	HSA or MSA custodian
Deadline	May 31	Jan 31
Used On	Form 8889, 1040	Form 8889, 1040

Together, they’re like your business’s bank statement: deposits and withdrawals, side by side.

Breaking Down Form 1099-SA (Box by Box)

Here’s what you’ll find on it:

• Box 1 – Gross distribution: the total amount you pulled out.
• Box 2 – Earnings: any income generated inside the account.
• Box 3 – Type of account: HSA, Archer MSA, or Medicare MSA.
• Box 4 – Death distribution: applies if the account holder has passed away.
• Box 5 – Check box: shows whether it was a normal distribution.

Each box tells a piece of your story. The IRS wants to know if the numbers line up with your receipts.

How Do I Get My 1099-SA Form?

You’re probably asking: how do I get my 1099-SA form each year? Easy, your HSA custodian is required to send it by January 31. That could mean a letter in your mailbox or a PDF on your bank portal.

If you used your HSA card at Walgreens, CVS, or even Publix here in Florida, the form will show those withdrawals. Don’t ignore it, it’s the breadcrumb trail the IRS follows.

Lost yours? Call your bank. They’re obligated to reissue it.

What Is a 1099 SA Form in Practice?

So, what is a 1099 SA form really? It’s a snapshot of every dollar that left your HSA or MSA. But whether that dollar costs you more in tax depends entirely on what you did with it.

• Pay a hospital bill → tax-free.
• Buy office chairs → taxable + penalty.
• Swipe it for protein shakes → sorry, taxable.

That’s the catch: the form itself isn’t dangerous. The danger comes if you can’t prove the expense was qualified.

Qualified vs. Non-Qualified Expenses

Let’s clear up confusion with real Florida-friendly examples.

✅ Qualified:

• ER visit after a soccer game accident.
• Prescription meds from Publix.
• Dental care in Orlando.

❌ Not Qualified:

• Paying rent for your Miami office.
• Gas for your business truck.
• A Disney annual pass (nice try).

The IRS publishes a full list in Publication 502, but those examples cover the gist.

Common Mistakes Florida Small Business Owners Make

1. Forgetting receipts. You can’t just say, “I swear it was for medical expenses.” The IRS won’t buy it. Every time you swipe your HSA card at Publix or Walgreens, you should keep a paper receipt or at least download the digital version. Without that proof, it becomes your word against the IRS, and if you’re ever audited without receipts, the outcome usually isn’t pretty. A simple folder, physical or digital, can save you hundreds or even thousands when tax season rolls around.

2. Mixing accounts. Some business owners swipe their HSA card for office supplies, payroll apps, or even gas for the company car. It might feel harmless in the moment, like you’ll pay it back later, but it’s a dangerous habit. Once you start blending personal medical spending with business expenses, it gets messy fast. The IRS doesn’t give you a “do-over” for accidental swipes. And if you’re ever audited, it’ll look like you were deliberately misusing funds, even if it was just a mistake.

3. Ignoring the form. Even if every single expense you paid with your HSA card was qualified and legitimate, you still can’t skip reporting it. The IRS doesn’t take your silence as proof that everything’s fine, they expect to see Form 1099-SA matched up with your tax return. Think of it like a teacher expecting homework: even if you knew all the answers, you still have to hand it in. If you don’t, the IRS may assume the worst, flag your return, and treat the distribution as taxable. That means more paperwork, extra penalties, and possibly even an audit, all because the form was left sitting in a drawer.

How Form 1099-SA Plays With Form 5498-SA

Think of it like bookkeeping. Your Form 5498-SA shows credits. Your Form 1099-SA shows debits. Together, they reconcile your health savings account.

When you file Form 8889, you’ll need both to prove:

• How much went in (5498-SA).
• How much came out (1099-SA).
• Whether distributions matched qualified expenses.

Without both, the IRS has an incomplete story. And incomplete stories usually mean audits.

Real Story: Maria in Tampa

Maria, a Tampa caterer, pulled $2,500 from her HSA for a surgery. She thought, “No big deal, it’s medical.” But she didn’t file it properly on Form 8889. The IRS matched her Form 1099-SA against her 1040 and flagged it as taxable.

She ended up paying extra tax and penalties, all because she didn’t tie her 1099-SA to her 5498-SA and receipts.

Don’t be Maria.

Filing Rules (Without Headaches)

• Always file Form 8889 with your 1040 if you have HSA activity.
• Match your Form 1099-SA numbers with receipts.
• Keep your Form 5498-SA as proof of contributions.

And here’s a kicker, while Form 5498-SA is sent by May 31, Form 1099-SA arrives by Jan 31. That means you’ll probably have your distribution info before you know your contribution totals. Keep both handy.

Should You File Alone or Get Help?

Yes, you can file it yourself. But as a Florida business owner, you’ve got enough spinning plates already. Between payroll, hurricane insurance, and your actual business, one IRS slip can cost you more than hiring an accountant.

That’s where we come in. We’ve worked with dozens of Florida small businesses, roofers, restaurants, and e-commerce shops. See more on our Industries We Serve page.

And if you’re ready to stop worrying about forms and start focusing on growth, Book Your Appointment today.

Why This Matters for Florida Business Owners

Taxes already feel like a maze. Throw in health savings accounts, and it’s like navigating I-95 in Miami rush hour. But when you see how Form 1099-SA and Form 5498-SA work together, it clicks. In plus out. Receipts in between. Simple, right?

So don’t wait for April panic. Organize your forms now, keep your receipts, and call for help if you’re unsure.

Wrapping It Up

Here’s the bottom line:

• Form 5498-SA = money going in.
• Form 1099-SA = money coming out.
• Form 8889 = ties it all together.

Get one wrong, and the IRS may come knocking. Get them right, and your HSA stays the tax-saving gem it was meant to be.

And if all this feels like one form too many, you’re not alone. That’s why JC Castle Accounting is here to walk you through it, step by step. Book your appointment now.

Quick FAQs

Q: How do I get my 1099-SA form if I lost it?
A: Call your bank. They must provide a copy.

Q: What is a 1099 SA form compared to Form 5498-SA?
A: One shows contributions (5498-SA). The other shows distributions (1099-SA). You need both.

Q: Do I always owe tax on Form 1099-SA?
A: No. Not if it was for qualified medical expenses.