 Adjustments to income from schedule one line twenty six. Let's go over that first a word from our sponsor Yeah, actually we're sponsoring ourselves on this one because apparently the merchandisers they Don't want to be seen with us, but but that's okay Whatever because our merchandise is is better than their stupid stuff anyways like our crunchy numbers is my cardio product line Now I'm not saying that subscribing to this channel crunching numbers with us will make you thin fit and healthy or anything However, it does seem like it worked for her just saying So yeah subscribe hit the bell thing and buy some merchandise So you can make the world a better place by sharing your accounting instruction exercise routine If you would like a commercial free experience consider subscribing to our website at accounting instruction comm or Accounting instruction dot think of it comm schedule one and check it out if we could Schedule one additional income and adjustments. We're on page number two Which is going to be the adjustments to income and we're looking at that health savings account Which could be further coming from the form eight eight eight nine In a prior presentation We went into more detail about the qualifications to be able to set up and put a deductible Contribution into a health savings account otherwise known as an HSA But a quick recap here you're gonna need to have that high deductible insurance plan Generally and then the tax questions that will come up are in a similar way I like to compare these kind of tax tools to say an IRA Because I think people have a better understanding of how the IRA works the question for taxes in Points of time when we use these tools is do we have a tax consequence when we put the money into? The account which is basically kind of like a normal financial type of account a savings account or stocks and bonds For example in the case of an IRA typically stocks and bonds in the case of a savings or a health savings account Possibly a savings account. We're gonna put that into a normal kind of account under the umbrella of a Tax tool like an IRA or a health savings account Do we get a benefit when we put the money in and then the money will hopefully grow over time? With interest that will accumulate or dividends if it was a mutual fund or the growth of the value of the stock Which is basically capital gain growth. Do we have to pay taxes as that money grows? That's the next question and then when we take the money out. Is there a tax impact when we take the money out of The account so here when we're looking at the adjustment to income We are questioning the initial putting money into the account and whether we get a tax benefit when we put the money into account and Typically we could that's the incentive to be putting the money into the account Although it will be severely restricted We won't be able to take it out unless we use it for the the things that it's supposed to be used for and otherwise It might have to be included in income or possibly subject to a substantial Type of penalty, so that's the general idea. So how do we put the money in there? Well, it could be something that is set up and helped to set up through the employee So the employer might be helping out to set up the health savings account Even though the health savings account is typically something that could be movable fairly easy by the employee if they were to change Jobs if it was put in there by the employer Then you would think it would be pretty easily reported on the W2 form so you'd get the W2 form and then in box 12 I believe you're gonna have this W Which would say employer contribution including amounts the employee elected to contribute using section 125 to your health savings account, so We'll be able to see that and that'll be it Fairly easy for us to see so if I was to mirror that we can say let's go into our wages and Let's say that we have a W in box 12 And then I'm gonna say let's say that they they put in the employer put in a thousand dollars Into the health savings account, so I would have my data input screen here If I go back on over that might not be enough to pull in because there's still more information I might need from form eight eight eight nine now also just to realize as I do that This might be something that should be reduced from income So that would mean that it might not be included then in The wages so the wages if I earned 100,000 maybe we would have we would only have the 99,000 here and then the Social Security if it was May or may not be if it was deductible for Social Security you'd have the Social Security Medicare I don't really want to change these because I want to keep I don't I don't want to change them every time But just realize it should already be reduced Properly in the income boxes on the W2 and then Put down here. Therefore, you might not have a deduction But it already is accounted for because it's been included for income So that's why the W2 is kind of nice, but you'd have to be able to explain that to someone So let's go then down to that eight eight eight nine just to check that out. So we're going to go to Form eight eight eight nine There it is. And so now it's it's defaulting to the self-only Plan, but you might have to add that information in order to pick it up So it's still populating this form So that we're attaching it, but you can see it's not something that's feeding into a deduction on the on The schedule one because the income we're imagining has already been reduced to the 99,000 Because of the W2 has been reported it thusly on the W2 now if you set up this HSA And they only put a thousand dollars in