Intuit Academy Tax Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Form 8889 is specifically designed for individuals to report contributions to and distributions from Health Savings Accounts (HSAs). HSAs are tax-advantaged accounts that allow individuals with high-deductible health plans to save for medical expenses. Completing Form 8889 is essential because it enables taxpayers to detail their contributions, claim tax deductions for those contributions, and report any distributions that were used for qualified medical expenses, which helps in determining any potential taxable income or penalties associated with non-qualified distributions.

In the context of the other options, reporting foreign income exclusions, applying for an extension, and declaring passive income are handled by different forms and have distinct requirements under tax regulations. Hence, Form 8889's specific focus on HSAs makes it critical for taxpayers who wish to manage their health-related financial planning effectively while adhering to tax laws.