BillM223,
As you indicated in a previous correspondence, the financial institution refuses to fix their error even though they initially said they would. They are stating that I withdrew the $860 prior to the IRS Extension deadline of 10/15/2022 for the 2021 tax year. This is true however, I did not file for an extension, I had already filed my taxes. My taxes were filed in 3/2022, processed by the IRS, and all taxes were paid/refunded per the filing. I do not believe you can file for an extension after you already filled your taxes, not sure though.
Any comments?
I think what I am going to be forces to do is file my taxes per the 1099-SA that I received so that all documentation matches in order to reduce the chance of an audit. Then in 2023 I will make an $860 withdrawal from my HSA. As stated earlier, at that point I will get a 1099-SA showing a qualified distribution for medical expenses. I will let TurboTax know that these funds were not used for medical expenses at which time it will assess me the appropriate taxes. Oh, by the way, TurboTax is not assessing me the 20% tax on this distribution because, per the instructions for the 8889 form, you do not have to pay the 20% tax if you are over 65. I was over 65 when I received the $860 excess contribution distribution in July of 2022, and hence, I will be still over 65 when I make the $860 distribution in 2023. This way all documentation matches.
What do you think? Do you agree that I am exempt from the 20% taxes because I am over 65? Do you think this is the right course of action to minimize an audit because all documentation matches?
Regards, Ketumm.
