Evan participates in an HSA carrying family coverage for himself, his spouse, and two children. In 2018, Evan has $100 per month deducted from his paycheck and contributed to the HSA. In addition, Evan makes a one-time contribution of $2,000 on April 15, 2019 when he files his tax return. Evan also receives a 2018 Form 1099-SA that reports distributions to Evan of $3,200 which Evan used for medical expenses. Compute the effect of the HSA transactions on Evan’s adjusted gross income.

The effect of the HSA transactions on Evan’s adjusted gross income is that the HSA transaction will DECREASED his Adjusted Income by the amount of $3,200

Explanation:

Based on the information given we were told that Evan has the amount of  $100 per month

which is been deducted from his paycheck in which the amount that was deducted ($100) is contributed to the HSA, Hence the effect of the HSA transactions on Evan’s adjusted gross income is that the HSA transaction will DECREASED his Adjusted Income by the amount of $3,200 which is calculated as :

Adjusted gross income = [($100*12) + $2,000]

Adjusted gross income=$1,200+$2,000

Adjusted gross income=$3,200

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