Dear BillM223, thank you so much for looking into our case.
Answers to your additional questions:
1. Were the HSA contributions through your employer, that is, were they reflected on your W-2 with a code of W in box 12?
Yes
2. Were the original contributions made in tax year 2023, therefore reported on your 2023 tax return? Or were they made in the course of two or more tax years?
Contributions were made in two tax years - 2023 and 2024.
Note:
We had Medicare Part A in both years and were not eligible to contribute to HSA, but only realized that in August 2024.
We filed the Amended 2023 return in September 2024.
3. Did you carryover some or all of the excess from tax year 2023 to tax year 2024?
Yes, some of the 2023 contributions were carried to 2024.
2023 contribution through payroll was $8750
Of that $8120 was spent on medical expenses.
But there was also money in that HSA contributed years ago.
4. Did you have a form 5329 on your 2023 return? What numbers were in Part VII?
No.
5. If the answer to #1 was "yes", then was the $14,000 added to line 8f of Schedule 1 (1040) on your 2023 return?
Line 8f of Schedule 1 (1040) on Amended 2023 return contains $8,750.
That is the entire contribution made in 2023 and withdrawn as excess in August 2024.
The rest of the $14,000 was 2024 contribution.
6. On the 1099-SA, what was the distribution code?
Our 2024 Form 1099-SA has two sections:
section 1
Gross distribution: $3,461.52
Code 1 (Normal distribution - medical expenses)
section 2
Gross distribution 14,288.96
Earnings on excess contributions: 289.04
code 2 (Return of excess contributions, ROE)
7. Why do you say that "We will be paying taxes on the $8750 amount twice, once for 2023 and once for 2024."
I am sorry, but I will need a lot more detail to understand what you did and what happened.
We started the 2024 TurboTax return by importing our Amended 2023 Report.
Should we enter all the numbers from the Form 1099-SA as they appear?
Will TurboTax figure out that part of the $14,000 ROE was already reported on the Amended 2023 Return filed in Sep. 2024?
The ROE withdrawals from Fidelity HSA account were made in two separate transactions - one for total 2023 contributions, one for 2024.
Fidelity sent us two letters - one for each transaction. Each letter has a total excess number and earnings on that amount.
The letter for 2023 for $8750 ROE was used to file the amended 2023 return.
So we are wondering if we should use the numbers from the second letter for 2024 ROE when populating the HSA dialog in TurboTax instead of the numbers from 1099-SA that contain combined ROE for both years and combined earnings.
