What does it mean if your HSA was overfunded?
You may have made excess contributions to your HSA or you may have mistakenly indicated to TurboTax that you did so. Please read the following for some common reasons how taxpayers indicate an excess contribution. One of the purposes of the HSA interview is to determine your annual HSA contribution limit.
Did you Overfund your HSA in 2018?
As long as you don’t contribute more than the allowable maximum for the year (see below), you have not “overfunded” your account. You may have a balance in your HSA at the end of the year if you did not spend all the funds that were contributed.
Why is Turbo tax saying I overfunded my HSA?
When TurboTax tells you there is an excess and you tell TurboTax that you will withdraw it before the due date of the return, then TurboTax will put this withdrawn excess on line 14b of form 8889. This is how the IRS knows that you withdrew it in time.
What is the total HSA contribution limit for 2018?
The 2018 annual contribution limit that individuals with single medical coverage can contribute to a health saving account is $3,450, an increase of $50 from 2017. The annual HSA contribution limit is $6,900 for those covered under qualifying family medical plans (up from $6,750 in 2017).
How do I correct an overpayment on my HSA?
You can correct excess contributions by removing the excess amount (and any earnings attributable to the excess contributions) before you file your personal income tax return for that tax year. By doing so, you do not include the amount of the excess contribution in your taxable income and you face no additional tax.
What happens if you over contribute to HSA?
If you’ve contributed too much to your HSA this year, you can do one of two things: You’ll pay income taxes on the excess removed from your HSA. 2. Leave the excess contributions in your HSA and pay 6% excise tax on excess contributions.
Why is TurboTax saying I overfunded my HSA?
Why is it saying this? It is possible to accidentally indicate to TurboTax that you had an excess contribution to your HSA, even if perhaps you didn’t. One of the purposes of the HSA interview is to determine your annual HSA contribution limit.
Did I Overfund my HSA in 2018?
What happens if you overfund your HSA in 2019?
Excess contribution in 2019: If you overfunded your HSA last year but withdrew the excess by the due date of your 2019 return, answer No to Did you overfund your HSA in 2019?
What is the penalty for excess HSA contributions?
For example, if you have a $100 excess contribution, your fine would be $6.00; if you contributed $1,000 over, it would be $60. This penalty is called an “excise tax,” and applies to each tax year the excess contribution remains in your account.
What was the contribution limit for HSA in 2018?
In 2018, the IRS changed the Family contribution limit from $6,900 to $6,850, then back to $6,900. If you contributed $6,900 to your HSA, then got $50 as a distribution when the contribution limit changed for the first time, the rules below don’t apply to you. Your distribution rules are here.
How do I Find my Excess HSA contribution?
Here’s how to find this: Divide your annual contribution limit by 12 to find your monthly contribution limit ($7,000 / 12 = $583.33). Then, divide your excess contribution by the monthly contribution limit and round up to the nearest whole number to see how many months you need to stay eligible for ($1,000 / $583.33 = 1.71, which rounds up to 2).
