Mary Wood, age 58, is single. • Mary earned wages of $51,000 and was enrolled the entire year in a high deductible health plan (HDHP) with self-only coverage. • During the year, Mary contributed $2,000 to her Health Savings Account (HSA) and her mother also contributed $1,000 to Mary's HSA. • Mary's Form W-2 shows $1,150 in Box 12 with code W. She has Form 5498-SA showing $4,150 in Box 2. • Mary has Form 1099-SA showing her HSA distributions. She used her distributions to pay the following unreimbursed expenses: o $500 for nine visits to a physical therapist after her knee surgery o $1,000 unreimbursed doctor bills o $280 prescription medicine o $1,500 replacement of a crown o $300 deep cleaning for teeth o $40 over the counter medication o $260 gym membership (for her general health and fitness) • Mary is a U.S. citizen with a valid Social Security number. Advanced Scenario 3: Test Questions What is the total unreimbursed qualified medical expenses reported on Form 8889, Part II? a. $3,860 b. $3,620 c. $3,580 d. $3,320

To determine the total unreimbursed qualified medical expenses that Mary can report on Form 8889, Part II, we need to identify which of her expenses are considered qualified medical expenses under IRS guidelines for Health Savings Accounts (HSAs). Qualified medical expenses generally include costs for diagnosis, cure, mitigation, treatment, or prevention of disease, and for treatments affecting any part or function of the body. They do not include expenses that are merely beneficial to general health, such as gym memberships. Let's review Mary's expenses: 1. $500 for physical therapy - Qualified 2. $1,000 for unreimbursed doctor bills - Qualified 3. $280 for prescription medicine - Qualified 4. $1,500 for replacement of a crown - Qualified 5. $300 for deep cleaning for teeth - Qualified 6. $40 for over-the-counter medication - Not qualified (unless prescribed by a doctor) 7. $260 for gym membership - Not qualified Adding up the qualified expenses: - Physical therapy: $500 - Doctor bills: $1,000 - Prescription medicine: $280 - Crown replacement: $1,500 - Deep cleaning for teeth: $300 Total qualified medical expenses = $500 + $1,000 + $280 + $1,500 + $300 = $3,580 Therefore, the total unreimbursed qualified medical expenses reported on Form 8889, Part II, is **c. $3,580**.

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