If I am self employed, what are the implications of HSA contributions on my Self Employment Taxes?

I'll be glad to take a stab at this. According to "The Pocket Idiot's Guide to Health Savings Accounts" written by Edie Milligan Driskell, CLU, CFP, she wrote the following:

QUOTE:
"If your corporation hires you to work for it, you qualify for the same tax treatment that is afforded all your other employees. If you take money that has already been taxed through your payroll calculations and deposit it into an HSA, you can adjust your income on Form 1040, line 25. You will have to complete Form 8889 as well. So your final income tax calculation for the year will factor in the HSA contribution. Since you are using after tax dollars to make the deposit, the FICA tax has already been withheld. The employer portion of the FICA tax has also been paid. You will not be able to recover this tax through your year-end tax filing."

In simpler terms, if you contribute to your HSA after taxes, then you can deduct the contributions at the end of the year on your Federal return. If you want to contribute before taxes, then you will have to set up or revise your current Section 125 Plan (cafeteria plan) to handle the HSA deductions.

By all means, ask your accountant for further information about how your state is handling HSAs so that you can take better advantage of them.

Hope this helps!

It does, thanks. Although Driskell's explanation is somewhat painful.

If you are self-employed or a 2% owner of the company, you can NOT make HSA contributions pre-tax or through a 125. They must be made with after tax dollars - then you make an above line deduction to your 1040.