My wife's plan is a family HDHP plan. I am covered under her plan, so I elected to decline the health plan offered by my employer. As outlined in the original post, we were on target to contribute to the annual limit until this stipend. My question remains:
My issue is that if I request the custodian for the excess contribution, the $1,100 principal + earnings will be treated as 'other income' by TurboTax, and I will now be taxed on the $1,100 that was already taxed once, since it is part of the post-tax contribution. I realize that I have to pay taxes on the earnings, and that makes sense to me. Is there any way to avoid the double taxation on the $1,100 in TurboTax?
I appreciate guidance from this group.
Thank you in advance.
