Well that is pretty sad news, thanks for answering the questions.
I found in the IRS Pub 969 about Deducting an excess contribution in a later year. Which states...
You may be able to deduct excess contributions for previ- ous years that are still in your HSA. The excess contribu- tion you can deduct for the current year is the lesser of the following two amounts.
If, under the last-month rule, you are considered to be an eligible individual for the entire year for determining the contribution amount, only those expenses incurred after you actually establish your HSA are qualified medical ex- penses.
1. So does that mean that if we contribute less than the max HSA contribution limit that this amount will come out of the carried forward amount of excess contributions?
2. If the answer is "Yes" for the prior questions, then does that max limit include the $1000 additional contributions for age 55 and over for my wife and I?
3. If we are able to go this way and reduce our contributions for this year then yes we would have to pay the 6% penalty for our 2019 return but would we be hit with any additional penalty fees? This may be a better option then paying a 20% penalty fee?
4. Can we reduce the excess contributions over multiple years by contributing a limit less each year?
5. Does it matter which of the HSA accounts (mine and my wife's) contributes less, or are we considered a family and amounts to each HSA does not matter as long as we are less than the max family contribution plus additional contributions for 55 and over?
Please answer all of the questions, thank you.
