Ok, I was able to calculate the gain/loss for the account for 2022 and 2023 @dmertz
It actually worked out well because the first contributions of each year hit my HSA on a Saturday, so clearly after the market closed. The net earnings were -$75.50 for 2022 (a loss) and $125.60 for 2023 (a gain). This makes more sense to me, given the performance of the stock market.
A question I still have is related to the loss-adjusted amount you refereed to earlier. On the instructions for Form 8889, it only makes this reference: "You also withdraw any income earned on the withdrawn contributions and include the earnings in Other income". And on the instructions for Form 5329, it says to "withdraw any income earned on the withdrawn contributions" but does not say I can add adjust for losses. Should I assume I need to add the income for 2023, but I can't adjust for the losses in 2022? Ultimately the HSA custodian is asking me for the amount I am requesting to be withdrawn (the excess contributions) as well as the income earned for both years. So my current interpretation is that I would be asking them to remove $3,600 for 2022 and report $0 income earned, and then asking them to remove $1,925.60 for 2023 and report $125.60 income earned. Do you know if this interpretation is correct?
Another small piece of ambiguity is on Form 8889, it refers to Excess Contributions You Make "including contributions made on your behalf" and Excess Employer Contributions. These don't seem mutually exclusive. All of my contributions were made through my employer via payroll. So for example, in 2022, I contributed $3,000 and they contributed $600 – on my behalf. On the tax forms they provide, this is all lumped together as a single value. Even on my pay stubs it only show as $150 per paycheck, not $125 from me and $25 from them. Do you happen to know where this is supposed to be entered? Thanks!
