Hello,
In 2022, I was only enrolled in a HDHP for only 5 months which prorated my (self) contribution limit to $1521. As a result, I contributed an excess of $681 to my HSA. By the end of 2022, my HSA distributions totaled $2537.57 which included the excess distribution of $681, current year contributions, plus rollover funds from previous years with a previous HSA custodian. At the end of 2022, the HSA account balance was $22.00.
When I filed in April 2023 for the 2022 tax year, TurboTax informed me... "You may want to withdraw money from your HSA. It looks like you have an excess contribution of $681. This amount is being taxed an extra 6%. But, anything withdrawn between January 1 and April 18, 2023 avoids this additional tax." I selected "No, I'm not going to make this withdrawal." Honestly, I probably didn't understand the question and in my head I was thinking that the HSA money was already spent.
Question 1 - Filing for the 2023 tax year, TurboTax is stating that I'll be taxed (again) 6% on the $681 excess contribution. Do I need to go back to my 2022 taxes and amend my response to the HSA withdrawal question? I believe the correct response should have been "OK, I'll withdraw the full $681 excess contribution by April 18, 2023." Otherwise, I don't know how to inform the government that the excess contribution has already been distributed.
Question 2 - Is there any further documentation I need to acquire from the HSA custodian? Because there were no contributions or distributions in 2023 for this HSA, I did not receive a 1099-SA.
