In 2022, we had an excess HSA contribution of $75 and filed 8889 and 5329. (as per box 12 W2)
In error, we did NOT select that we would withdraw the funds before filing and paid the 6% tax penalty. We contacted the custodian to withdraw the funds and it appears to have only made things worse.
They didn't withdraw any funds. Instead, they rolled forward $100 (more than the excess contribution) and deemed it part of 2023's contributions and did not tell us to adjust our contributions.
Now TT is telling me I have to pay 6% per year (in perpetuity) on these funds and struggling with 2023 taxes.
We have several issues we need to fix here:
1) In-progress: We contacted custodian with a withdrawal request to remove $100 from our 2023 contributions to get the excess out of our account once and for all. Hopefully this removes the 6% in perpetuity issue. They stated they will send a 1099-SA for 2023.
2) We need to amend 2022 taxes to correctly show that this was not in fact supposed to be penalized and was rolled forward prior to the filing deadline for 2022. Having read other posts on this topic, this appears to be filing an amended 2022 return in TT, but mailing it because the 5329 cannot be generated electronically with line 47 as $0. Please verify.
3) On amending 2022, is this now classified as a "withdrawl before April 18, 2023" when it is rolled forward to the following year in TT ? and how do we account for the fact that they rolled forward $100, not the $75?
4) After amending 2022 in TT, can I reimport my amended return to synchronize TT for filing 2023 correctly?
@dmertz you appear to have answered many posts in this area and your expertise would be appreciated.
