- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Deductions & credits
1. As you now know, you did not have to sign up for Medicare until you began to take Social Security. Or, as you note, you could sign up for Medicare when you lost your large employer group coverage plan.
2. "So I find out that my HSA will be penalized for any money in there that I have contributed." No, as Opus pointed out, you will be penalized for (1) any money you contributed in excess of your annual HSA annual limit which will vary based on what month (and year) you went on Medicare, and (2) any money in excess that you failed to withdrew from your HSA by the due date of the return - that it, the IRS gives you a chance to correct the excess contribution without penalty.
3. As for withdrawing from Medicare and reapplying later, this is not so trivial. Please see how AARP describes the process and the concerns.
4. When you go through the HSA interview in TurboTax, be sure to enter those months you were on Medicare. This will affect your annual HSA contribution limit, and if you were on Medicare for all 12 months, then all your contributions would be disallowed and treated as excess.
So when did you go on Medicare (year and month)? If you went on Medicare in 2022, this is relatively easy to address, but if you went on Medicare in 2021 or before, then the fix is more difficult.
NOTE, I said that the IRS allows you to withdraw the "excess" without penalty, but only by the due date of the return. This year, the due date is April 18th, unless you live in certain disaster counties in California, Alabama, Georgia, New York, and Mississippi. (if you live in one of these states, please tell us). Or, alternatively, if you file an extension, then you have until October 15th to address this excess issue.
**Mark the post that answers your question by clicking on "Mark as Best Answer"