Hi,
I am a CA resident who over contributed to my HSA account last year by about $200. I want to remove the excessive contribution by deadline (with extension). It looks like I have two with two options:
1) Withdraw in cash.
2) Rollover the excessive contributed amount to this year.
My question is:
1) Is option 1 better than option 2?
2) Do I need to file 5329 in either case?
3) For federal tax, I was also suggested to include the excessive contribution into other incomes in 1040. What shall I do with CA tax? Will I be double-taxed on the $200 if I increase my taxable income by $200?
Thanks
