Hello! In 2022, my wife made an excess contribution of around $2,969 across two HSA accounts ($1,256.98 to one, $1,712.50 to the other). Our tax consultancy firm at the time advised us to withdraw those contributions around November 2023, which we did. We have in hand 1099-SA's, for calendar year 2023, for both withdrawals (flagged with distribution code 2).
However, we later learned that our tax firm neglected to file those 1099-SA's with our 2023 taxes, which had escaped our attention. For tax year 2024, due to dissatisfaction with that firm, we switched over to using TurboTax to file, and noticed that we were being penalized for this $2,969 overcontribution that had never been addressed.
Before I get too far ahead of myself, I am hoping to confirm the best path forward for addressing this HSA excess contribution once and for all, and for avoiding future penalties (I will not lose much sleep over penalties already paid, but I do want to avoid future penalties for 2025 and beyond). Because our withdrawals of these excess contributions were for calendar year 2023, my interpretation of next steps is as follows:
1. Obtain a copy of TurboTax 2023
2. Look for an option that lets me amend my 2023 return
3. Have the software generate a Form 8889 that shows the removal of this excess contribution of $2,969
4. Attach the 1099-SA forms from 2023, which I already have in hand, that report these reimbursements
5. File this amendment to 2023 federal taxes electronically
6. Look for this $2,969 overcontribution, and associated penalties, to be wiped out when working on 2025 taxes
Am I in the right ballpark with the above? I greatly appreciate any advice or expertise that can be provided by the community. Many thanks!
Chris
