2014 Health Savings Accounts (HSA) Exam – Scenario 4: Carlos and Julie MartinInterview NotesCarlos, age 45, and Julie, age 41, are married and will file a joint return. They have two children, Andrea and Roberto, whom they will claim as dependents on their joint return. Julie’s cousin, Sergio (age 32), came to live with them in August 2014. Sergio’s gross income was $4,000. Julie and Carlos did not provide over one-half of Sergio’s support for the year but did pay $700 of Sergio’s medical bills in October 2014. Carlos was enrolled all of 2014 in an HDHP with family coverage. Carlos has had an HSA for five years. He has no other health insurance and is not eligible for Medicare. In 2014, Carlos made regular contributions to his HSA totaling $3,000. In 2014, Carlos took $1,500 from his HSA to pay the following medical expenses:$200 for over-the-counter allergy medicine for their daughter, Andrea (no prescription from doctor) $375 for Roberto’s physical therapy sessions. $300 to purchase Julie’s contact lenses (needed for medical reasons) $625 for long-term care insurance for CarlosCarlos, Julie, Andrea, Roberto, and cousin Sergio are all U.S. citizens and have valid social security numbers.9. The adjustment to income on Form 1040, line 25 for Carlos’ HSA deduction is:A. $3,000B. $3,300C. $4,000D. $6,550
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